The Market Vectors Coal ETF (KOL) is down 1% over the past month, but over the previous 90 days the once downtrodden KOL is up 6.3%.
This week, KOL is lower by 2%, but the ETF was able to reclaim its 200-day moving average for the first time in over a year.
So while it can be said KOL has been behaving less poorly than it did in 2012 and 2013 when it posted annual losses of almost 21% in both years, the ETF is still lacking momentum. [Coal ETF Tries a Comeback]
“The RSI has moved into the bullish zone but it made a lower high and is now looking at a lower low. The MACD is also moving lower. And at the bottom, there are no signs of accumulation, just a flat line,” says Greg Harmon of Dragonfly Capital.
KOL is being troubled by some of its international holdings, an important consideration because ex-U.S. markets comprise 61.3% of KOL’s country weight. Over the past month, Consol Energy (CNX) and Peabody Energy (BTU) are up an average of 5.4%. Those stocks combine for 13.4% of KOL’s weight.
Smaller U.S. holdings are also plaguing the ETF. Over the past month, Arch Coal (ACI), Alpha Natural Resources (ANR) and Walter Energy (WLT) are down an average of 17%. Cloud Peak Energy is off by 12.5%. [Nat Gas Rises, but no Help for Coal ETF]
This at a time when rising natural gas prices should be benefiting coal stocks. According to Bank of America Merrill Lynch Global Research, the higher gas prices have been driving a “significant” return to coal, RTCC reports.
Perhaps that is one reason why KOL’s technicals remain tepid if not unappealing.
“As a technician I see this ETF in consolidation, not a trend higher, and therefore no need to be long it at this point. Should it make another higher high and turn that 200 day SMA high, gaining some separation, accompanied by a turn in the RSI and MACD upward and some accumulation then it gets interesting. Until then everyone else can have at it. And I will watch from the sidelines,” said Harmon.
Market Vectors Coal ETF