Yanzhou Coal Mining
A similar setup is forming in shares of Yanzhou Coal Mining (YZC), the sixth-largest coal miner in the People's Republic. Like LFC, Yanzhou is forming a long-term ascending triangle setup that's been forming since the latter half of the third quarter. The resistance level to watch in YZC right now is $27.
Looking at the technicals in YZC from a more economics-driven perspective, the setup in this stock all comes down to a case of supply and demand. Essentially, there's an excess of supply of shares above the $27 level -- that is, it's a price above which sellers become more eager to sell and take gains than buyers are to buy. The result is a price level that acts as a sort of ceiling for shares of Yanzhou.
The uptrending support level below shares gives us an important clue about investor sentiment in this stock. Because Yanzhou is posting higher lows, we have a hint that buyers have some control over price action; a breakdown below that trend line indicates that that's no longer the case.A move above $27 is significant because it shows us that the upside barriers to movement have been squashed; keep a close eye on that price. Follow @stockpickr