Bullish on Coal (KOL)
Exchange traded funds are becoming a favorite of mine for harnessing the returns of a whole sector while only monitoring the performance of one instrument. The exchange traded fund KOL is the best on the market for simulating the returns of the entire coal industry, from refiners to coal burning power generation units, KOL is an excellent opportunity to be invested in the coal industry from top to bottom.
KOL is extremely trendy, since inception in January 2008 the ETF has traded in just four major trends. Up down up down, this ETF is ready for another bounce based on technical levels and the worldwide consumption of coal fueled electricity. Electricity is the next big energy bubble, far more plug in hybrid cars and demand from all around the world is pushing up electricity prices and inevitably the price for coal products.
Coal is very much poised for a turnaround back to July’s highs. The energy meltdown resulting from large paper trades has pushed the price of coal producing stocks well off their highs but I think a turnaround is in the mix from fundamental demand and the technical analysis showing this ETF is simply way oversold. Coal is used to produce 49% of all electricity in the United States and will see a gigantic boost when the winter heating months come to the United States. For all these reasons I think KOL is a great addition to your ETF holdings.
Right now I’m hesitant to buy this ETF below $42 per share where there is extremely strong support and resistance. Above $42 this ETF should easily rise to meet the coming downtrend where a breakout would indicate a very strong movement coming in the price, probably to around $50 per share. Right here I’d hold until any decent confirmation of entry, $42 and change is a great entry price.
