Getting Coal in Your Stocking May Be Exactly What You Want

NEW YORK ( -- What if you just got a lump of dirty old coal in your stocking for the holiday, 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 ( RIMM), which is now up 100% in the past 30 days, Alpha Natural Resources ( ANR), up 30% in two weeks, First Solar ( FSLR) up 20% in 20 days, the list goes on. My main focus is on ETFs, because of the lower risk they provide, while being 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, 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. You can read about that here, where I used Apple ( AAPL) and Research In Motion shares as my examples.

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 generating 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. It's likely we see a one- or two-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).

Coal Sector ETF Showing Stage 1 Basing Pattern

Coal stocks have been bouncing on the 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.

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