This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

8 Stocks Setting Up to Break Out

Market Vectors Coal ETF

Another stock that's already started to breakout is the Market Vectors Coal ETF (KOL), which looks to replicate as closely as possible the price and yield return performance of the Stowe Coal Index. So far in 2011, this ETF is up around 7.3%. That could simply be just the start of the gains for KOL.

In the aftermath of its natural disaster, Japan is going to demand a ton of energy to rebuild itself. Coal just flat out makes sense because it doesn't have any of the risks of nuclear energy.

If you take a look at the chart for KOL, you'll see that this ETF has already started to trade above some major overhead resistance at around $50 a share. This move is technically constructive because its coming as the stock has moved out of sideways trading channel. That channel shows that buyers came in to support the stock at around $45 a share, and there had been resistance at around $50, until now.

Technically, when a stock breaks out of a channel like this, it usually means the stock is entering a new uptrend. What makes me even more confident about this breakout is that it's coming on huge volume. During the past two trading sessions (both up days), volume was around 1 million and 1.4 million, vs. the three-month average volume of 618,000 shares. That's telling me that institutional investors are getting into this ETF, and what's great is that they're doing it at the breakout point.

So where can KOL trade to next? I would look for the stock to now make a run at its all-time high at around $60 a share. Any move about $60, and I would add to current or new positions, since it could mean it wants to trend higher for some time.

International Coal Group

If this breakout in KOL continues, and I expect it will, then you're going to see other coal stocks follow suit. One name in the space that technically looks fantastic is International Coal Group (ICO). This company is a producer of coal in the Northern and Central Appalachia.

This stock has been doing nothing but making higher highs and higher lows for the past six months, which is very bullish. Traders should now watch for a breakout if the stock can take out some overhead resistance at around $11.50 a share.

International Coal, which shows up in the portfolio of Prem Watsa's Fairfax Financial Holdings, is highlighted on a recent list of 10 Coal Stocks With Upside.

4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AVL $0.34 14.00%
GMO $0.80 -1.20%
MCP $1.02 3.50%
CGR $0.18 0.00%
TIE $16.50 0.00%

Markets

DOW 18,120.01 +39.87 0.22%
S&P 500 2,119.90 +2.21 0.10%
NASDAQ 5,095.0550 +2.97 0.06%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs