Anyway you look at it, it's very unattractive company.
First of all, coal as source of power is on it's way out because of high pollution generation.
Second, price of coal is close to 10 year low.
Yet, about 35 % of power plants in US run on coal and government wont let this industry disappear overnight.
There is not much hope for coal producers and traders in long run, but short term call option trade could be rewarding .... IMO
*I am thinking, the hot summer could cause higher demand for energy and force energy producers to restart coal plants and that could put upward pressure on coal prices....Higher coal prices could benefit coal producers like Peabody Energy BTU, chart also looks promising with oversold signs.
-I am long on BTU calls with expiration July 17th, let's see what happens in next 2 weeks....
*Price of coal in last 10 years
IMO, I think BTU has support at or around $2.75 a share, so I am betting that it should bounce off this support and start to trade upward , though, it might be bad bet if price of coal stays below $55 per tone
ReplyDeleteehh, I was right on my prediction on BTU, but my timing was off, I should have buy stock instead options.... live and learn, I guess or every mistake you make and learn from it makes you smarter ? :)
ReplyDelete