Discussion in 'Stocks' started by Landis82, Feb 27, 2009.
Outperforming the market this morning.
ACI, BTU, CNX, MEE.
DO, RIG, HP.
Busting out all over the place.
OIH just printed 76.00 after a morning low of 70.90
Anyone here on ET trading this sector, or is everyone at class and/or paper-trading?
Capitulation day in the Coal Sector today.
ACI, FCL, MEE, BTU, CNX, and JOYG.
Long BTU, JOYG
Any reason why?
Every single one of those is down since 2/27.
I show a high of 71.83
Where'd you get 76???
I hate coal!!! (in my best tree-hugger militant voice).
Seriously though, the fundamental picture of natural gas is so absolutely bleak for the balance of this year and likely into the early part of next, that we are facing an overwhelming glut this summer. Natty is going to NEED to find demand and will only do that by falling much lower in the coming months to compete with coal-fired generation. This competition will also drive coal prices lower, however, due to the physical dynamics of natural gas production and storage, natural gas will win a price war between the two commodities out of necessity for demand.
I have not looked at coal equities, but I am warning that coal prices can and likely will fall much lower in the coming months.
Nat-Gas does provide a cheaper substitute.
But 3-straight months of manufacturing gains in China ( announced today ) along with JOYG re-affirmation of 2009 guidance have the COAL GROUP soaring today.
They are one of the greatest ( if not THE greatest ) trading sectors in the ENTIRE market!
While it can go either way by EOD, I don't see anything to get excited yet.