Peabody Energy (BTU) — A Clean Stock in a Dirty Neighborhood
Peabody Energy Corp. ($BTU) averages are at $19.31 (21 day SMA), $18.68 (50 day SMA), $18.56 (200 day SMA). Over the past 52 weeks BTU has traded from a low of $14.34 to a high of $28.75. BTU was last at $18.87 on a volume of 3,715,590. Average daily volume has been at 6,194,760.
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Peabody Energy (BTU) has been trading higher in a series of higher highs and lows since establishing a bottom last July. Now, the entire coal industry has been given up for dead by most traders because of federal regulations and a move toward “clean energy.” But while the sentiment has been poor, the Dow Jones U.S. Coal Index ($DJUSCL) is up more than 35% since the July bottom. Peabody Energy is up just around 30%.
These are impressive moves in a sector that nobody seems to like.
Looking at the daily chart of Peabody Energy (BTU), you can see that the stock is back down to an up trending support line – right around $18. At the same time, the stochastics oscillator (which is an indicator of momentum and/or “overbought” vs. “oversold”) is flashing a buy signal.
Also, those who monitor moving averages will note that the 50-day moving average is crossing from below to above the 200-day moving average. This type of crossover is widely viewed as confirming a new uptrend.
There are a lot of reasons to like Peabody Energy right here. And buying the stock now, with a stop just below $18 sets up a high probability trade with a defined risk.
Peabody Energy Corporation is involved in mining. It mines, prepares, and sells thermal coal to electric utilities and metallurgical coal to industrial customers.
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