Trend Profile - Western Coal Corp.

  • 18 October 2010 |
  • Written by  Skot Kortje, Stock Trends Analyst
  • font size
  • Print

 King Coal shows strength on emerging-market demand.

The Stock: Western Coal Corp. (WTN-T)  Recent price: $6.50

The Trend

Gains by commodity stocks since the end of August have been
considerable, and the number of stocks in resource industries with new
bullish price trends has surged. The S&P/TSX Metal Mining index is up 33
per cent in the period and the sector has been a major reason the
Toronto market has climbed back above its first-quarter peak. But
non-base metal mining stocks have put up stellar autumn performances,
too - including uranium mining shares after a strong move last week. Not
lost in the broader mining rally, though, is the resurgence of many coal
stocks.

Market Vector Coal ETF and the Powershares Global Coal Portfolio have
fired up 29-per-cent gains during this most recent commodity rally.
Component stocks in these funds represent different aspects of the coal
industry, but coal miners are the main polish on the group. The coal
market's fundamentals are correlated with Chinese economic prospects in
particular, and the growth of developing markets in general, so the
bullish trends of coal mining stocks relates a positive sentiment from
investors about the global economy.

Improved fundamentals for the U.S. coal industry are showing in the
stocks of its major producers. Although finishing last week on a soft
note, shares of Peabody Energy have advanced in prime technical form,
trading a string of six straight weeks of higher highs and higher lows.
A similar recent rally in CONSOL Energy and even better performances
over the past 13 weeks by the stocks of Alpha Natural Resources, Arch
Coal, and International Coal Group suggests the group will finish 2010
above the resistance that capped industry share prices over the past year.

Canadian coal stocks have shared the upbeat tempo. Integrated miner Teck
Resources, a current Stock Trends Bullish Crossover stock, announced a
new 10-year deal with Canadian Pacific Railway to ship coal from its
mines to West Coast terminals, a positive indicator of the company's
demand for coal transport capacity. Shares of Grande Cache Coal hit a
road bump last week, but are still outperforming the broad Toronto
market by 20 per cent over the past three months. The stock of Cline
Mining Corp. is also holding on to its big September gains. And surely
enjoying the glow of the coal fire is Westshore Terminals Income Fund,
operating Canada's busiest coal export facility. Its units have been
trending positively since the second quarter of 2009 and continue to
notch all-time highs.

The Trade

Western Coal shareholders appreciate the improved conditions. The stock
has recovered from a huge setback after shares collapsed from an April
high of $6.97, dropping below their previous bullish trend line to
eventually find support at the $3.50 level. The mid-year dip is coming
full circle, though, as the stock is approaching its first-quarter peak
again. The crossover of the 13-week moving average above the 40-week
moving average is a Stock Trends signal to review this stock for an
intermediate-term trade, but a move to a new 52-week high would be a
good trade trigger. Shares dropped to $6.23 early this week, so patience
might be in order.

 

 

The Upside

If the industry momentum helps carry this stock through the final months
of the year, a move above $7 should deliver a further 15-per-cent gain
ahead.

The Downside

An emerging-market shiver could cool down coal stocks. A drop below
$5.50 would be an early signal that this trend trade has derailed. 

back to top

Subscriber Testimonials

  • I find your website and research very helpful in my stock trading. I have subscribed to several related services in the past and none present their work with “just the facts” as you. Please keep up the great work so that I can continue to learn! 

    Bryan E., Subscriber
  • I very much like the systematic approach to analyzing stock data, it fits my approach.

    Subscriber
  • Just thought I'd call to thank you, Skot. Stock Trends Weekly Reporter helped pay for my daughter's education!

    Peter H., Subscriber

  • An admitted cynic, it's obviously very high praise when he says he likes StockTrends because of its "simplicity, utility, openness, [and] honesty," and in addition to having "no hidden agenda" is "understandably documented [and] historically verifiable." And, he adds, "It lets me see a lot of things without doing a lot of work." Globe and Mail

    Paul W., Subscriber

  • I am just writing to tell you of my appreciation of your service! It makes so much sense to me. You seem to be an oasis of stability and sensibility in a stockmarket jungle.

    Adrian S., Subscriber

  • I am fascinated with your service and methodology - it is very impressive. [...] Over the years I have concluded that there are many ways to approach stock investing, but once one has chosen a path, one is better off sticking to it.

    Bob E., Subscriber

  • Your report is an impressive, excellent tool and I have recommmended it to friends.

    Colin E., Subscriber

  • Stock Trends information is part of the base information I review before making a trade.

    Subscriber
  • Hence, anyone who had followed the "Stock Trends" line should have sold their Bre-X shares and, with the windfall, paid for a lifetime subscription to The Globe and Mail and more. Talk about return on investment!

    Muni P., Subscriber

  • I have had the good fortune to be reasonably successful and enjoy the investment process. Your process would be recommended for both experts and those who are new to investing.

    Frank I., Subscriber
  • I am something of a momentum investor. I find Stock Trends useful as I can look at my portfolio as a “watch list” and quickly see where trends are declining in strength or reversing, so it is particularly useful as a tool in portfolio management regarding sales.

    William C., Subscriber
  • I want to thank you for posting such an excellent guide to technical analysis on the web. You have provided a great service to all of us novice investors.

    Michael C., Stock Trends user
  • Thank you for your excellent work and kind approach to your customers.

    Odette C., Subscriber

  • I've followed your recommendations since reading your columns in the Globe & Mail, and finding they published Stock Trends arrows in their financial listings. I do find them a guide to the general market and what I should be avoiding for declining chart trends.
    Has probably saved me the subscription by not rushing into hot stocks!

    Anthony D., Subscriber
  • Stock Trends Weekly Reporter is an easy way to pick up equities that represent an upward trend.

    Subscriber
  • You have created and maintained an amazing, highly educational program and I am grateful for your part in getting our retirement funds to the good place they are.

    Karin M., Subscriber
  • There is a lot to be gained from comparing trends of how individual stocks are doing within a sector, as well as how the sector is performing relative to the broad market.

    Dudley R., Subscriber

  • I use Stock Trends to help direct my stock picks. Also, following the advice of Stock Trends I have religiously used stop-loss orders and have avoided hanging on to losing stocks for emotional reasons.

    John B., Subscriber
  • I've followed a number of Stock Trends picks, and the methodology is solid.

    Doug B., Subscriber

  • Stock Trends analysis quantifies nicely the movement of individual stocks. I’ve found that if the technicals are out of synch with fundamental analysis, it is a wake-up call to make a decision. The Stock Trends Bull/Bear Ratio is useful in identifying major market bottoms and tops. It has always presented a good buying or selling opportunity.

    Charles G., Subscriber

Subscription Plans

Subscription Plans

STWR - Monthly

$19.95

Monthly subscription plan to Stock Trends Weekly Reporter - pay your monthly subscription fees by having them automatically charged (PayPal only). Free 7-day trial period. Subscribers may cancel before the end of any subscription month.

STWR - 1 Year Prepaid Subscription

$199.00

1 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 16% off monthly rate!

STWR - 2 Year Prepaid Subscription

$299.00

2 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 37% off monthly rate!

STWR - 3 Year Prepaid Subscription

$399.00

3 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 44% off monthly rate!

Stock Trends Editorial

  • Stock Trends Inference Model: A Statistical Foundation for Smarter Investing
    Stock Trends Inference Model: A Statistical Foundation for Smarter Investing At the heart of Stock Trends is a conviction: market data is not noise, but information. For more than three decades, the Stock Trends framework has given investors a disciplined way to interpret market cycles, trend signals, and momentum patterns. The Stock Trends Inference Model (ST-IM) is the natural extension of this approach, embedding rigorous statistical reasoning into the reports available for every listed stock…
    Read more...
  • Technology Sector Split: Hardware & Chips vs. Software – A Deep Dive with Stock Trends
    Technology Sector Split: Hardware & Chips vs. Software – A Deep Dive with Stock Trends The uncertain interest rate environment is evident in a number of sectors, and the stock market is always reflecting both the trend of the cost of capital and the anticipation of changes in it. The technology sector is especially sensitive to interest rates and generally feeds off the risk-on investor appetite supported by lower interest rates or expectations of relatively lower rates. But all technology…
    Read more...
  • Resource rotation remains strong
    Resource rotation remains strong The summer season is coming to a close. It is sometimes a sleepy market season because investor attention is elsewhere. However, the market has provided us with some definite messaging over the past few months. The themes of rotation and building strength in resources and energy stocks, notably fueled by an AI transformation across the broader economy, are key highlights that investors should pay attention…
    Read more...
View all Stock Trends Editorials
 
 

Subscription Plans

STWR - Monthly

$19.95/Month

Monthly subscription plan to Stock Trends Weekly Reporter - pay your monthly subscription fees by having them automatically charged (PayPal only). Free 7-day trial period. Subscribers may cancel before the end of any subscription month.

STWR - 1 Year Prepaid Subscription

$199/Year

1 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 16% off monthly rate!

STWR - 2 Year Prepaid Subscription

$299/2 Years

2 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 37% off monthly rate!

STWR - 3 Year Prepaid Subscription

$399/3 Years

3 Year Prepaid subscription to Stock Trends Weekly Reporter. Save 44% off monthly rate!