A NEW TREND FOR COAL STOCKS
Coal stocks have been miserable performers this year.
The price of coal has fallen nearly 30% since last October. Low prices are cutting into the profit margins of many coal producers.
Most of these companies are loaded with debt. And they’re bleeding red ink…
KOL, a fund that holds a basket of coal producers and related stocks, dropped more than 50% from July 2011 to July 2012.
But the sector may be ready to turn higher…
Ever since Mitt Romney mentioned coal companies favorably during the first presidential debate, coal stocks have been trending higher.
And as today’s chart shows, KOL is now approaching an important resistance level. If it manages to break out to the upside, there’s a lot of room for coal stocks to run.
– Jeff Clark
Source: Market Notes