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Why a coal in your stocking may be what you need

Chris Vermeulen Chris Vermeulen, TheTechnicalTraders.com
0 Comments| December 17, 2012

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We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately, they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?

The only individuals who would appreciate a dirty gift like that would be those forward-looking investors who see major opportunities before they become the next big movers and headline news.

Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found Research in Motion Ltd. (TSX: T.RIM, Stock Forum) (NASDAQ: RIMM, Stock Forum) which now up 100% in the past 30 days, Alpha Natural Resources Inc. (NYSE: ANR, Stock Forum) up 30% in two weeks, First Solar Inc. (NASDAQ: FSLR, Stock Forum) up 20% in 20 days and the list goes one. My main focus is on ETFs because of the lower risk they provide but very powerful when applied to individual stocks.

Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.

In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.

The BIG BOARD – NYSE - Weekly Major Stock Market Trend

The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).

Click to enlarge

Coal Sector ETF Showing Stage 1 Basing Pattern

Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.

Market Vectors-Coal ETF (NYSE: KOL, Stock Forum) coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market.

A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.


Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.


To view the rest of this article, please click on the link:

https://www.thegoldandoilguy.com/articles/getting-coal-in-your-stocking-may-be-exactly-what-you-want/



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