“Our thesis is that we're in a bull market for energy,” says
John Bollinger in
Capital Growth Report. “Our strategy is to buy energy assets on pullbacks.” Here's his look at coal.
“Though we may be near or at capacity production in oil, new supplies of industrial commodities will continue to come on line. The critical dimension is demand, which is strong and growing.
“Remember, at its heart technical analysis is but a way of quantifying supply and demand and here as in many other markets, demand has outstripped supply as is clearly evident on the charts.
“In my view, the demand curve for energy has crossed up through the supply curve – supporting a bull market. These assets that we buy to invest in this trend can be any of the many energy ETFs, big international oil companies, exploration and drilling outfits, natural gas stocks and now … wait for it … coal companies. I know coal is politically incorrect, but that will pass.
“The rational for coal is straightforward. America has a huge supply of coal, 300 years worth by some estimates, and in a world increasingly demanding energy, that coal is going to be increasingly valuable.
“From a technical perspective, there are numerous stocks that look great; they have long declines leading to big bases that are just now starting to show breakouts.
“Here are some names to look at: Massey Energy (NYSE: MEE), Peabody Energy (NYSE: BTU), Westmoreland Coal (NYSE: WLB), Fording Coal Trust (NYSE: FDG), Arch Coal (NYSE: ACI) and James River Coal (NASDAQ: JRCC).
"For those of you who like the leverage lower priced stocks can bring here is a cheapie, International Coal Group (NYSE: ICO).”
