Coal Stocks are still working in this tape. Let’s look at $ARCH – May 24, 2022


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This is Scott with your Chart of the Day. I don’t know about you but I don’t know too many people that get really excited about coal, except maybe bad kids around Christmas, but coal stocks are working great in this market. We have a couple of coal stocks we are trading over at and I wanted to share this setup with you today from Arch Resources ( NYSE: ARCH ).

As you can see, if I zoom out here a bit ARCH ( NYSE: ARCH ) is in a well-defined uptrend and above all the major moving averages. Now, compare that to the SPY ( NYSEARCA: SPY ), which is in a major downtrend, at least for now, and below all the major moving averages.

ARCH ( NYSE: ARCH ). is working great in this market. And in my opinion, is a stock that you should definitely keep an eye on. Because if the market does turn around, this is near its highs, and so if this follows the market higher there is not nearly as much resistance near the highs. So the setup here on ARCH ( NYSE: ARCH ) is, that it is in a nice short base of consolidation, it has been going sideways for about a month or so.

We have some clearly defined levels of resistance, look right here. It hit resistance, bounced back, bounced back, bounced back, bounced back. It got above but couldn’t hold above, and then here we are again, we are just kind of at that 176.00 zone on ARCH ( NYSE: ARCH ). It looks better on a short-term chart.

It hit that level, flushed, and then the buyers, look at the volume here on the short-term chart. Buyers came in; brought it back up but it went up a little bit too fast and now we are just kind of chugging higher with this 30-minute uptrend on ARCH ( NYSE: ARCH ). I don’t know when this stock is going to go or if it is going to go at all.

I definitely think that the 176.00 level is something to watch. So I am going to set an alert just below 176.00 for the next month. And I am going to look for a strong move above that level and a close coming on higher than average volume. Now, that will probably give me at least some sense that the stock is moving out of consolidation.

If it does break above that level ideally you would want to take that trade and put a stop right under either that 8-day or the 21-day exponential period moving average. A close below those 2 lines, and do you know what? Maybe the stock is not ready to go just yet, but I will be watching it move through 176.00, coming on higher than average volume.

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