The fundamentals for coal haven't suddenly turned overnight to warrant a 9% up move in these shares. NG prices are still low, I DON'T BUY takeover speculation, and my hunch is that this move is related mostly to chatter coming out of Europe and the sudden lower dollar this morning.
The momentum players might be interested in buying at these levels for a run at $25+ but based on what I see it the more prudent move is to lighten up on shares here and buy pullbacks if one is trading. BTU is back in bullish mode by my interpretation of the charts so going short also looks risky.
If the rally in general continues then the Coal stocks will move up. Absent any substantative "event" that would change psychology we will e hostage to the mood swings in the market and the constant litany of all the analysts who profess they know what drives the Coal market. So wherever we are going in the short run (if it is going to be up) then I need a guardian angel that can whisper in my e ar that I should pack my tent before I get my head kicked in for the 30th time.......
Check out the China infrastructure news overnight. This is a big deal as China is 45% of the global market for metallurgical coal and iron ore. Infrastructure spending is amplified in the general economy, and China generates 80% of their electricity from coal. Even if you don't buy the impact of this, you've got to admit a runup can happen for no reason other than to restore valuation to a PE of 15.
Where are you in the last 24 hours? The heel with ECB or dollar. The material stocks are rallying huge because China announced mega infrastructure stimulus yesterday/today. It is worth more than $120 billions. Today is just beginning. Enjoy the rally.. :)
Read the Paul Santos article today on the materials suppliers' moves. I agree with him. Though I may be wrong, I think we're seeing an overheated response today to companies like ANR, CLF and BTU and I see the group being cheaper in the coming days. Good time to add, at LOWER levels.