The cold weather in the Eastern US is forecast to continue through March. Currently natural gas prices are $3.50 mmBTU and moving higher. Last week the Joy Global CEO predicts that natural gas prices will rise to $4.50 - $5.00 per mmBTU. I find it curious that coal stocks have been sold down during the last 30 days just when the trend towards higher natural gas pricing is emerging. Also, the shorts are all over the coal boards. I think that the coal stocks are ready for a big bounce soon.
I suspect the sector won't move up before quarter end, when institutions may decide rotate into the sector with gains off stocks they're holding now. We need higher natgas prices but also some strength in the economic recovery to push power demand and steel consumption up. If BTU drops back below 20 I will add to my long position leaps calls 18 strike 2015 expiry .