Scott looks at Coal, the most hated energy. $AMR $BTU – October 21, 2022
GX1040 BTU AWR
This is Scott with the Chart of the Day. I want to take a look at one of the most hated trades in the market. And, arguably one of the dirtiest trades in the market, and that is Coal (IGX1040).
Now, coal has been in a strong uptrend pretty much all year. And of course, the coal trade, the energy trade, and all the commodities really kind of ramped up coming out of the Ukraine/Russia invasion thing. That really kind of pushed this into new high ground, and a lot of other commodities.
Now, I will be honest, I don’t love coal. In fact, I don’t know anyone who does love coal. It is what Santa gives the bad kids for Christmas. No one wants coal, but if it comes down to it, if you have got to heat your home you are going to do it in any way you can. And coal is, for better or for worse, one of the cheaper forms of energy.
As we get into the winter I still think we should be watching some of these coal stocks. We will start things off here with BTU ( NYSE: BTU ). Now, BTU ( NYSE: BTU ), coming out of the pandemic, was a penny stock, it was under $1.00. And has since gone up almost 3,000 percent off of the pandemic low.
So this has been a monster trade, whether you caught all of the 3,000 percent or even the last 100 percent. And so this is a stock that we defiantly should be watching because it is still in an uptrend even after all of that move. You can see how it’s holding above its blue line here, that’s the 200-day moving average.
Now, it is just kind of chopping around. As it stands right now, it is holding around that 100 EMA. And so if I were to look at this right now I would say maybe a low-risk entry would be a stop just under 22.80, something like that. Then you are holding it because you think it will go up here. And if it goes down here, obviously, you are stopped out. But this is one that has pulled back from the highs, you can see it has a clear level of resistance right around that 29.25.
And then if I look at another one like AMR ( NYSE: AMR ), it’s holding up a little better. It is above all the major moving averages. Now, this one does have a little bit of a smaller float, it probably has a little bit of a wider spread. It doesn’t trade a million shares a day, typically. But again, this one is near some highs.
And so despite the fact that a lot of these coal stocks have had massive runs, I still think they have potential. And so I am going to watch AMR ( NYSE: AMR ) here, for a move right above this little consolidation base. Again, you can see how it got above, couldn’t hold above, and now we are testing just underneath that level again. So I think having an alert maybe around that 160.00 zone for AMR ( NYSE: AMR ) totally makes sense.
So AMR ( NYSE: AMR ), and BTU ( NYSE: BTU ) are just 2 of the many coal stocks that we are watching at StockMarketMentor.com. Maybe consider adding these to your watch list this weekend.
Free Chart