Cheniere is under pressure despite repurchasing $350M shares from Icahn

Cheniere Energy, Inc. (NYSEAMERICAN:LNG) announced the repurchase of $350 million in shares from Icahn Enterprises. Share repurchases are often a positive signal as it affirms the company’s own confidence.

Cheniere said that the repurchase underlined a strong belief in the strengths of the industry-leading LG platform. The company also said the repurchase was part of its long-term capital allocation plan. The stock was, nonetheless, less changed after the repurchase.

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Cheniere is already losing momentum as investors take profits around the all-time high. So far, the stock has returned 27% year-to-date on the strengths of the energy sector. In its first-quarter results, the revenue more than doubled to $7.48 billion.

The revenue exceeded $5.56 billion estimates and $3.09 billion in the prior year. The company reported a quarterly loss of $3.41 compared to an expected income of $3.45. However, the revenue underlined the strong growth of Cheniere.

 As energy prices continue to soar, we believe Cheniere presents an opportunity. But we believe that at the high valuation, investors should exit their positions.

Cheniere holds onto the support, but momentum is weak

Technically, Cheniere is still holding onto the support of $130. There is no trigger for a break below, but the stock is already losing the upside momentum. The 50-day MA has joined the resistance, and we project a potential break below $130. However, with fundamentals still strong, investors should consider buying lower. Potential support will be around $117, coinciding with the 200-day MA.

Summary

Cheniere Energy is losing momentum after touching an all-time high. The stock could slip below the $130 support. Investors can buy lower and ride the stock up, in line with cyclical moves.

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