TheStreet.com's Jim Cramer says both oil futures and equity futures can move these hot issues.

Will the futures pull down the oil and gas stocks today? No, I don't mean the oil futures, I mean the equity futur

Last week when oil exploded, we caught two days of trading that dropped the stocks hard. We caught a bit of a bid in the nat gases like Chesapeake (NYSE:CHK) and Devon (NYSE:DVN) but at the end of the day, but the stocks were truly overwhelmed by the simple fact that they are in the indices.

This pattern has really held down the integrateds: last week Conoco (NYSE:COP) should have exploded, but it couldn't because it is such a big part of the S&P. Chevron (NYSE:CVX) and Exxon (NYSE: XOM) are no different.

The natural gas stocks are not as big a factor, but they can be rocked down without a problem.

I am not saying to avoid looking at the oil futures. They can control the stocks. I am saying that the equity futures tide can take down anything, even when the oil futures spike hard.

Chesapeake Energy Corporation (NYSE: CHK) is engaged in the acquisition, exploration, and development of properties for the production of natural gas and crude oil. The firm is the second-largest independent producer and third-largest overall producer of natural gas in the United States. Company properties are located in the US midcontinent region, along the Gulf Coast, in the Permian Basin, and in the Ark-La-Tex region. It owns interests in nearly 39,000 producing wells and has nearly eleven trillion cubic feet equivalent of proved reserves.

Chesapeake pleased investors last week, when it announced that it had formed a joint venture with Goodrich Petroleum (NYSE: GDP) that would give it working interests in deep strata of the Haynesville Shale of East Texas and Louisiana. The move is expected to make Chesapeake the largest U.S. natural-gas producer, pushing it past BP (NYSE: BP) and Anadarko Petroleum (NYSE: APC).

Chesapeake Energy (NYSE: CHK) shares are trading higher after the company announced it has entered with Goodrich Petroleum Corp. (NYSE: GDP) into a joint venture to drill for oil and natural gas in northwest Louisiana. Oil and natural gas futures are both rising this morning, giving CHK an extra boost. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CHK.

After hitting a one-year low of $31.38 in August, the stock hit a one-year high of $61.44 last week. CHK opened this morning at $60.48. So far today the stock has hit a low of $59.78 and a high of $61.45. As of 11:50, CHK is trading at $60.96, up $1.70 (2.9%). The chart for CHK looks bullish and deteriorating slightly, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in just one month as long as CHK is above $50 at July expiration. Chesapeake would have to fall by more than 18% before we would start to lose money.

CHK hasn't been below $50 since April and has shown support around $52.50 recently. This trade could be risky if the prices for oil and other energies fall off some in the next few weeks, but even if that happens, that position could be protected by support the stock might find above $50, where it bottomed out in the past two months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CHK.

Chesapeake Energy (NYSE: CHK), the third-largest overall producer of natural gas in the U.S., is recently up $2.68 to $58.76. Bloomberg reports Natural Gas Futures are up 1.93% to 12.76. RBC Capital Markets has an Outperform rating on CHK. CHK call option volume of 52,281 contracts compares to put volume of 9,743 contracts. CHK July option implied volatility of 43 is above its 26-week average of 34 according to Track Data, suggesting larger price movement.

Volatility Index S&P 500 Options-VIX up 2.46 to 21.09.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

"The boom in natural gas prices has been good for North American producers and their investors, both of which continue to be upbeat on the sector as share prices also keep rising," says Bill Martin.

In his exceptional BullMarket.com, he looks at SandRidge Energy (NYSE: SD), where its billionaire CEO as well as a director have continued to buy shares, despite the stock trading near "peak levels."

"Oklahoma City-based SandRidge focuses on the exploration, development, and production of oil and gas in the West Texas Overthrust, East Texas, and Mid-Continent (Oklahoma) regions.

"President, and CEO Tom Ward purchased 460,000 shares at $48.95 on May 19th/20th, which increased his already substantial holdings to nearly 36.95 million shares, or a 25.27% stake.

"It was the first purchase for Ward since he announced in March his attention to buy up to $100 million in stock on the open market this year. His only other open-market purchase came in November 2007, when he took down 4.17 million shares at $26.00 in the company's initial public offering.

MAJOR PAPERS:

• Merger talks between UAL Corporation's (NASDAQ: UAUA) United Airlines and US Airways Group Inc (NYSE: LCC) have been put off for now, the Wall Street Journal reported. United is reportedly close to an alliance with Continental Airlines Inc (NYSE: CAL).
• Harris Corporation (NYSE: HRS) is for sale and the company has begun to hear from interested parties, the Wall Street Journal also reported. Harris is looking for $75 to $80 per share. Speculation about the bidders includes General Dynamics Corporation (NYSE: GD) and Northrop Grumman Corporation (NYSE: NOC).

OTHER PAPERS:

• The Charleston Gazette reported that Chesapeake Energy Corporation (NYSE: CHK) has decided not to build its Eastern Division headquarters in Charleston, West Virginia in the wake of a West Virginia Supreme Court ruling on May 22.

WEB SITES:

• AppleInsider reported that Apple Inc (NASDAQ: AAPL) is expected to announce a back-to-school deal soon that will encourage students to buy new Macs by offering some of the largest incentives in the history of the company.

TheStreet.com's Jim Cramer says lots of companies now thrive with crude up here.

Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.

Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.

Take all of the companies involved with making a Boeing (NYSE: BA) (Cramer's Take): Boeing itself, Alcoa (NYSE: AA) (Cramer's Take), Honeywell (NYSE: HON) (Cramer's Take) and Precision Castparts (NYSE: PCP) (Cramer's Take) being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.

Or how about all of the companies involved with process and flow control and efficient motors: Parker-Hannifin (NYSE: PH) (Cramer's Take), Emerson (NYSE: EMR) (Cramer's Take), Eaton (NYSE: ETN) (Cramer's Take) and Flowserve (NYSE: FLS) (Cramer's Take). Those work higher with higher energy prices. CSX (NYSE: CSX) (Cramer's Take), Burlington Northern (NYSE: BNI) (Cramer's Take), Kansas City Southern (NYSE: KSU) (Cramer's Take), Union Pacific (NYSE: UNP) (Cramer's Take) and Norfolk Southern (NYSE: NSC) (Cramer's Take) are smaller energy users than trucks, and they ship plenty of ethanol and fertilizer.

Chesapeake Energy (NYSE: CHK) is the largest independent and third-largest overall producer of natural gas in the U.S.

Bloomberg reports Natural Gas Futures are up 0.20% to 11.621.

CHK option implied volatility of 40 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

NASDAQ 100-QQQQ overall implied volatility at 24; 26-week average is 28

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

TheStreet.com's Jim Cramer says natural gas producers are having a great year, and Anadarko may be the best of the bunch.

Marcellus Shale. Ghana. Brazil. Wherever the oil and gas is. Wherever the chances to boost output.

That's Anadarko (NYSE: APC) (Cramer's Take).

Fifteen percent growth or higher for many years. That's Anadarko.

Creating value for shareholders. That's Anadarko.

IPO of Western Gas. That's Anadarko.

And more important, it is not ExxonMobil (NYSE: XOM) (Cramer's Take).

Anadarko is one of six companies, including Apache (NYSE: APA) (Cramer's Take), Southwestern (NYSE: SWN) (Cramer's Take), XTO Energy (NYSE: XTO) (Cramer's Take), Chesapeake (NYSE: CHK) (Cramer's Take) and Devon (NYSE: DVN) (Cramer's Take) (El Paso (NYSE: EP) (Cramer's Take) is threatening to join them!) that are believers.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Archer Daniels Midland Co. (NYSE: ADM) Q3 profits soared, beating analysts' expectations.
• Buffalo Wild Wings Inc. (NASDAQ: BWLD) strong Q1 results met analysts' expectations.
• Burger King Holdings Inc. (NYSE: BKC) reported solid Q3 results that beat Wall Street estimates.
• Chesapeake Energy Corp. (NYSE: CHK) beat expectations for the first quarter, sending shares up.
• Colgate-Palmolive Co. (NYSE: CL) posted better-than-expected Q1 results on the weak dollar.
• Corning Inc. (NYSE: GLW) beat earnings expectations and raised its guidance.
• Corn Products International (NYSE: CPO) posted record sales for the ninth consecutive quarter.
• Duke Energy Corp. (NYSE: DUK) Q1 profits met expectations but revenues beat them.
• ExxonMobil Corp. (NYSE: XOM) missed Q1 expectations due to narrower margins.
• Garmin Ltd. (NYSE: GRMN) reported lower-than-expected earnings due to slowed demand.
• General Motors Corp. (NYSE: GM) posted a smaller-than-expected loss for the first quarter.
• Herbalife Ltd. (NASDAQ: HLF) posted Q1 results and announced the resignation of the president and COO.
• Kellogg Co. (NYSE: K) beat Q1 expectations and announced a 10% dividend increase.
• Kraft Foods Inc. (NYSE: KFT) Q1 profits declined but beat analysts' expectations.
• Procter & Gamble Co. (NYSE: PG) reported better-than-expected Q1 results and raised its 2008 outlook.

Chesapeake Energy (NYSE: CHK) shares are trading higher after CHK reported a first-quarter loss of $132 million, or 29 cents per share, last night. However, CHK shares are rising today, as the company's adjusted profit came to $561 million, or $1.09 per share, beating analyst estimates of 93 cents per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CHK.

After hitting a one-year low of $31.38 in August, the stock hit a one-year high of $55.00 last week. CHK opened this morning at $51.82. So far today the stock has hit a low of $50.70 and a high of $52.82. As of 12:35, CHK is trading at $52.67, up $1.73 (3.4%). The chart for CHK looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) buy rating.

TheStreet.com's Jim Cramer says it's not a strong-dollar sell -- the story here is still too good.

Why did natural gas go down last week? What was that? Inventories were down. The commodity price was up. The fuel itself is green. It is better than ethanol and it is being used to fuel an increasing numbers of cars and trucks.

The whole move down had to have been triggered by something, right? Yeah, how about the fact that the stocks were up a lot and were due for some profit-taking.

Recall that the real "reason" they went down is that the dollar "got strong," and that was supposed to trigger commodity deflation; natural gas is a commodity and is therefore going to go down. (Barron's made this very case this weekend, oblivious to the facts, but loving the theory.)

This kind of thinking is just so stupid that it shows you can get chance after chance after chance to own the fuel that can take care of the nation if we just let it. Of course, the stocks began to come back later in the week as threats of supply cut-offs of crude -- they came true this weekend -- made natural gas declines virtually impossible, despite the "sense" that it peaked. So the money has came back and I believe will continue to come back.

"After coal, natural gas is the No. 2 source for power generation; and the largest source of gas production in the US is now unconventional reserves," explains Neil George.

In his Personal Finance newsletter, the advisor looks at two favorites plays on this trend: Chesapeake Energy (NYSE: CHK) and XTO Energy (NYSE: XTO). Here is his review.

"Unconventional reserves now account for close to 40% of all domestic gas production. In addition, with the possible exception of deepwater fields, unconventional production is the only domestic source of gas that's likely to show real growth in coming years.

"The term 'unconventional' refers to any gas field that can't be produced economically using traditional well technologies. But, using a combination of new techniques, wells drilled in unconventional fields are prolific producers. US natural gas producers remain on a 17%-plus tear in gains so far this year.

It's been a big day for Chesapeake Energy Corp. (NYSE: CHK). The company said that it has made a big gas discovery in Shreveport, Louisiana, which could have material impact on its output. The reserves could amount to 20 trillion cubic feet, and Chesapeake is pumping up its capital expenditures by $275 million this year and $675 million in 2009.

No doubt, the expectation is that there will be some serious needs for energy, despite the recent slowdown in the US economy. It certainly helps that natural gas prices have been particularly strong. And, for the most part, natural gas is critical for basic needs, such as electricity and heating. Oh, and it tends to be cleaner.

On CNBC today, energy tycoon T. Boone Pickens said that he owns Chesapeake's stock (and yes, he had some nice things to say about the company). He also thinks that oil will remain above $100 per barrel for the second half of the year.

In today's trading, Chesapeake's stock price is up 3% to $46.45.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

MOST NOTEWORTHY: E-Trade, Sterling Bancshares and Research in Motion and were today's noteworthy downgrades:

• Bank of America downgraded shares of E-Trade (NASDAQ: ETFC) to Sell from Neutral, as they no longer believe the value of the company's retail brokerage business can offset negative value at the bank.
  
• Sterling Bancshares (NASDAQ: SBIB) was downgraded to Neutral from Outperform at Baird on valuation.
  
• Morgan Keegan lowered its rating on Research in Motion (NASDAQ: RIMM) to Market Perform from Outperform, and believes the 8000 series upgrade cycle will likely slow and that share performance will be impacted by expectations of a slowing economy..

OTHER DOWNGRADES:

• UAL Corp. (NASDAQ: UAUA) and Johnson Controls (NYSE: JCI) were downgraded to Equal Weight from Overweight at Lehman.
  
• Chesapeake (NYSE: CHK) was lowered to Equal Weight from Overweight at Morgan Stanley.