At this point all 3 Coal plays we were watching acquired their upside targets. That means we take profits and keep on the watchlist for the next potential bullish pattern.
$KOL Currently looks like healthy consolidation above the neckline.
$TCK Acquired bullish inverse H&S target since this post. Now watching for consolidation and a move above 7.75 to fire next pattern.
$SXC still looks ready to pop, with consolidation right at the neckline. Needs to hold up there but if we clear out the sellers, should be rip city.
This is an election year, so maybe the bet here is on a white house that is not so focused on global warming and the destruction of the coal industry. Maybe it is a bet on a Republican win. Whatever it is, we are seeing bottoming price action again here in Coal $KOL. Now, I do want to remind you that we did see this type of action back in the end of 2015, and it sold off miserably. That being said, I believe it is worth watching this pattern closely to see if it can complete and then form another bullish pattern. Telling us that maybe we have bottomed.
I will probably take a stab at the breakout small and may play 2 of the stocks within the ETF which have good price action. Not all coal stocks look good, but the two below $SXC and $TCK fit my trading style.
What do you think?
$SXC – Bullish inverse H&S pattern under constuction
$TCK – Small Inverse H&S pattern in motion. The Target is 5.70. Acquiring that target will tell us more about whether these stocks may want to bottom out for good.