Chesapeake Energy Corporation (CHK) has been trading in a sideways channel for the last two years, after seeing a 400% increase the three previous years. It is not clear yet whether or not CHK has broke through channel resistance. In the last few weeks, there has been heavy selling pressure, due to Hurricane Dean not making landfall on U.S. soil. This selling pressure could continue until another hurricane threatens Gulf of Mexico oil and gas production.



Generally natural gas, which directly influences stock prices in natural gas companies, trades lower in the summer, because demand is lower. Although there are many natural gas turbine generator power plants, the majority of natural gas is used in heating homes during the winter. The only thing that can drastically interrupt natural gas prices is a supply shock, like a hurricane.



So I'm watching CHK. If it breaks resistance at aroudn 34.00, it could see some substantial buying interest for the long term. But even if it doesn't break channel resistance, I could still trade it sideways profitably.

Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.