Chart UpdateWeekly Chart. RSI gaining strength while not being overbought at 57. 20 + 50 weekly MA to cross.
ACI trade ideas
ACI: The coal stock leading the comebackCommodities have been breaking out all over the place this year, but coal has missed the party. every analyst has something to say about why and when coal will break out, and while I do agree for some extent, the truth is pretty clear, miners are severely undervalued even when taking into account low coal prices.
Technicals:
1. We have a strong base where 10wma and 30 wma have been oscillating for the last 8-10 months. Just this week the 10wma has crossed the 30wma. on the daily ACI has been climbing quite a bit, so I'd be on look out for a low risk entry soon as a strong crossover could be on its way.
2. RSI has had a "break out" and is reaching highs that haven been seen in 2011. This signals strength and belief is coming back to the stock and that some accumulation might be happening. I'd be on the look out for rsi making higher lows on the weekly.
3. Slow, orderly decline, followed by capitulation and long basing is a very strong signal for a potential turn around. In this case almost every seller who has wanted to sell has sold and very few people are bag holding, meaning resistance should be low if the stock starts going for new highs.
Fundamentals:
1. ACI is highly in debt, but it isn't nothing too crazy with the right approach.
2. low price to sales ratio
3. operating losses not horrible once non recurring expenses are excluded.
4. natural gasses going up could help coal make a comeback.
Risks:
There are still many risks, mainly that coal could go down more as high supply keeps it from moving forward.
ACI has to find a way to manage its debt situation, and the longer it takes, the worse it could get.
Conclusion: The chart is showing potential bottoming action, basing, and an imminent breakout. The only concern I have is that the general market might be in need of a correction, and that could affect ACI a little bit, but I highly doubt we will see new 52 week lows in this stock. If the market pulls back substantially i'd be looking to see If I could get this stock at a discount, but regardless if you buy now or then, this looks to be a low risk entry.
Call me Crazy - Coal looking interesting hereNo long position yet, but coal is looking like it could be setting up for a move higher. Looking at charts of coal stocks over the past 5 years shows plenty of false breakouts and a reverse lower.
The difference here is we've recently seen a good amount of false breakdowns and continued basing without moving substantially lower. This sort of action demonstrates the possibility that selling has actually dried up.
RSI is shaping up on ACI for a move higher with price testing resistance on the symmetrical triangle. A breakout here isn't necessarily an immediate buy, but it certainly sets the stage to put coal stocks back on your long watch list to enter on pullbacks. I picked ACI as it's cheap on a relative basis and left for dead, so long term holdings should consider adding if a bottom is confirmed.
More to come in the near future as follow ups.
looking to go up with the commidities trainstock has changed behavior and looks like it might want fill the gap at 6.9.
break out above 4.7 area will confirm bullish thesis
Gonna get really interesting above its 200 dailyBeen there before but couldn't hold for long. Let's see this time round. Steel acting well as well.
