A Look at Coal Stocks

Posted by downtowntrader | 9/30/2009 07:10:00 PM | View Comments

Back in May, we discussed possible accumulation in the coal sector based on solid price action that was occurring in some of the stocks. Many of these stocks were clearing bases on good volume, and were in the process of consolidating the initial breakout by trading in bull flags. In general, this group did indeed move higher following their May breakouts, and ended up building new bases in the subsequent months.

The Market Vectors Coal (NYSE:KOL) ETF for instance, broke out of a bull flag in mid May, rallying to $27 a share. KOL proceeded to consolidate for a couple of months before making a new high in early August. After trading to new highs, KOL continued to consolidate, although in a narrower range than before. It looks like it is beginning this process once again with a new high in September, followed by a quick pullback to test the breakout area. While the rally in KOL has not set the world on fire, KOL has been steadily setting higher highs and higher lows.

other symbols in this article include:

Market Vectors-Coal ETF (Public, NYSE:KOL)
Patriot Coal Corporation (Public, NYSE:PCX)
Arch Coal, Inc. (Public, NYSE:ACI)
James River Coal Company (Public, NASDAQ:JRCC)

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