Scott looks at some Black Gold (Coal) charts. $ARCH $CEIX – April 26, 2022


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This is Scott with your Chart of the Day. I want to take a look at two coal charts because coal has turned into black gold, at least as far as the market is concerned because real gold ( NYSEARCA: GLD ) is not so great. It is under the 50-day, under the 21-day, and under the 8-day. But if you look at a stock like Arch Resources ( NYSE: ARCH ), a big move off the 50-day, coming on higher than average volume. Now, as a swing trader that’s the kind of stuff I am looking for.

And then if we take a look at another coal stock, something like CEIX ( NYSE: CEIX ), Consol Energy. Again, look at this, it closed right above that 8-day exponential period moving average and did it on pretty good volume, so there is still a bid under a lot of these coal stocks. And so I think CEIX ( NYSE: CEIX ) is definitely one you want to keep an eye on, and ARCH ( NYSE: ARCH ), this is massive volume.

If I zoom out here, some of the biggest volume this stock has had in years and on a pretty bad day in the market as well. The market was so blah today, that I basically just cried under my desk all day. But I did see Arch ( NYSE: ARCH ) move off the 50-day and do it on higher than average volume. I think this is definitely a sector you want to keep your eyes on.

Now, I would say watch for a move through here but I think this stock really is something you want to keep an eye on closer to that 21-day exponential period moving average because it had a 20 percent day. And if this stock opens lower tomorrow and I am swinging some overnight, chances are some sellers are going to come into this.

So I wouldn’t look to FOMO anything like this, pretend it didn’t make a 20 percent day today, and look for it, I think, kind of closer to these moving averages. As long as it can hold above these key moving averages I think it is something you will want to pay attention to. It’s the same thing here with CEIX ( NYSE: CEIX ). Watch it close to the major moving averages, but if it has a big up-day, don’t be the one buying at the top.

I really think in this market you have got to be very careful with buying anything breaking out. Because if the market is making new lows and something is breaking out, you are going to get some things happening. You are going to see momentum traders coming in, helping to push the stock higher. If you see that stock open lower, guess what? Those MOMO traders are gone, they are going to sell right away, and then that is going to, potentially, cause a cascade effect and you will see more sellers come in.

So I would just be very careful about buying something that is up 20 percent in one day, especially a commodity of any kind because it is based on a lot of geopolitical stuff. I would just keep an eye on this because I really like the fact that this had a lot of strength, coming on higher than average volume at a key moving average.

So keep an eye on Arch ( NYSE: ARCH ), keep an eye on CEIX ( NYSE: CEIX ), and watch for entries close to some clear support zones so that you know that if it moves the other way you’re wrong, small loss, and you are moving on to something else.

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