Yesterday's action in coal stocks was, in my opinion, very constructive on technical basis. Although it is not out of realm of possibility that stocks will consolidate recent gain (and I will be watching today's trading for signs of some follow through), I also think it is likely that we shall see some breakout moves to upside here soon. For instance, Alpha Natural Resources (ticker ANR) broke above near-term resistance on greater-than-average volume.
The next swing point on ANR is at $11.92, or the closing low on May 15. This move is being confirmed by a rising MACD and RSI in conjunction with an improving money flow and accumulation/distribution line.
I am also seeing a much improved technical dynamic in the more speculative names in the coal space, specifically James River Coal (ticker JRCC). This name was nearly written off earlier in the year and speculation swirled that it was going BK. Now however, the stock has the same technical backdrop as in ANR, but has fully retested the 200 day moving average. To me, this is very constructive and suggests that investors are becoming more comfortable with the turnaround story.
I will not go through all the chart of the coal companies, but I will finish by saying that traders and investors appear to be betting on an improved outlook for thermal coal. in contrast, the metallurgical coal producers, technically speaking, still appear weak relative to their industry brethren. For instance, the charts of Walter Energy (ticker WLT) and Tech Resources (ticker TCK) have not broken above near-term resistance levels. I remain invested in coal stocks in my portfolios and in my trading portfolios.
The next swing point on ANR is at $11.92, or the closing low on May 15. This move is being confirmed by a rising MACD and RSI in conjunction with an improving money flow and accumulation/distribution line.
I am also seeing a much improved technical dynamic in the more speculative names in the coal space, specifically James River Coal (ticker JRCC). This name was nearly written off earlier in the year and speculation swirled that it was going BK. Now however, the stock has the same technical backdrop as in ANR, but has fully retested the 200 day moving average. To me, this is very constructive and suggests that investors are becoming more comfortable with the turnaround story.
I will not go through all the chart of the coal companies, but I will finish by saying that traders and investors appear to be betting on an improved outlook for thermal coal. in contrast, the metallurgical coal producers, technically speaking, still appear weak relative to their industry brethren. For instance, the charts of Walter Energy (ticker WLT) and Tech Resources (ticker TCK) have not broken above near-term resistance levels. I remain invested in coal stocks in my portfolios and in my trading portfolios.
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