Arch Coal is Just the Best of a Bad Group
- Posted by Greg Harmon
- on August 14th, 2012
This past weekend I made a note that there is finally a coal chart that I could start to like, Arch Coal, $ACI. What seems to have been missed is the caveats that came with my future approval. Let me explain in more detail. The daily chart below shows a bottoming formation, nothing more. The price has stopped falling and is moving sideways. It has a Relative Strength Index (RSI) that has continued to stall at 60 and a Moving Average Convergence Divergence indicator (MACD) that has been running flat and is now starting to fade. Consolidation at best on this time frame, with the
Arch Coal, $ACI, Daily
possibility of a minor double top at the falling 100 day Simple Moving Average (SMA). It will take a move over 7.70, a higher high to start a bullish watch. The weekly picture puts it into perspective. The channel between 5.80 and 7.70 shows a MACD that is trying to move higher and a RSI that is slowly trending up, but the MACD is still very near zero and the RSI is not yet over 40
Arch Coal, $ACI, Weekily
and starting to roll lower. Nothing bullish here, move along. Finally, the monthly view is showing nothing more than a bear flag with a RSI that is running along the oversold line but not extreme and a MACD that is negative and slowly going no where. Go ahead and put your money in this name if you have some fundamental reason. Frankly with a slowing world economy I am not sure what that could be. But from a technical perspective this stock is treading water and has not shown that it will even survive. With the broad market looking much better, I will pass.
Arch Coal, $ACI, Monthly
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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