I am reversing my early sell on CHK and now rating CHK a buy. There are a number of reasons. The first and foremost being their new gas discoveries. These deposits were found several months ago but I felt the market would not be able to hold the gains it made given the decline in oil prices. I now feel oil prices will likely move higher in the near term especially if we get a decline in the dollar which I am also predicting.
CHK's discovery is possibly the largest gas discovery in history. If the country starts moving to shift its auto fuel to CNG CHK will have superb positioning. If not it will continue to fuel other applications. Either way CHK is in great shape. The only real risk is what will the broad market do. If you have to go long anything these days it should be in sectors that dont operate on leverage and are inelastic demand.
$36.12 (09/30/08)
