Coal Stocks: The Best Trade in the Market Right Now
By Jeff Clark
December 7, 2006
Back on October 12th I told you it was time to buy oil stocks.
In hindsight, it was an easy trade to recommend. The technical look of the sector and the fundamental valuations of the individual recommendations made them low risk trades with high profit potential. That's trading nirvana…
And nirvana pays off. That week, I gave told S&A Short Report subscribers my two best trading ideas for the oil sector. We sold one position for a 100% gain last week. We sold the other position yesterday for a gain of 110%.
That same condition exists right now for several of my favorite coal stocks. Take a look at this chart…
The Dow Jones U.S. Coal Index broke out of a bullish falling-wedge pattern, consolidated that breakout, and is now poised to move higher. From a technical point of view, it really doesn't get much better than this.
The fundamentals of the sector look great, too. In fact, just yesterday, I received a report from Dan Ferris - editor of Extreme Value and one of the best fundamental analysts on Wall Street. Dan is bullish on coal.
I didn't know Dan was looking at coal. And I don't think Dan knew what I was looking at, either. I do know, however, that whenever the fundamentals and the chart patterns align in such a way that we're both recommending the sector, then it's a pretty good idea to buy a few shares.
Be careful, though. Not all coal stocks are created equal. Some stocks will provide fuel for your portfolio and others will spontaneously combust. So be selective.
Dan is recommending a stock he says could double your money in the next year. The two trades I told subscribers about could double in the next three months. So whether you're looking for a fundamental investment or a couple of short-term trades, coal is a great sector to be in.
And who knows? This might be the first Christmas you'll actually want to get a lump of coal in your stocking.
Best regards and good trading,
Jeff Clark
