BTU Peabody Energy Weekly Chart Spring 2011 Negative Divergence Top Positive Divergence Now

Coals continue to look weak but BTU is interesting. Keystone called the top in the sector in the springtime. The yellow lines show the rising wedge, overbot conditions, and negative divergence that created the spring time spank down. Quite a few months have played out now and price is beaten like a rented mule, falling from over 72 to a 33 handle now, an over 50% collapse.  China now says their economy is slowing but the coal traders obviously saw it coming long before now.

But all is not lost, focus on the white lines.  Price is now down to the same level as the closing low in October and look at the strong positive divegence showing for all indicators on this weekly basis. The worst is over. The indicators wanted to see another lower low in price and BTU is receiving that price move right now.  Somewhere from the white circle price will launch nicely. Simply watch it closely to select an attractive long entry.

The daily chart based at the October low so it is agreeable to further upside anywhere in here, from 31.00 to 33.26, the current print. The 32.5 to 33.0 area looks bueno for a long entry so Keystone will watch for that behavior over the next few days. The other coal stocks such as CNX, ACI, PCX all show similar chart set-ups. BTU and PCX are leading the pack and should bottom and recover first. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.