The Closing Print live trading and financial blog during market hours.

An executive order was signed on Tuesday that is already having an effect on coal producers. The S&P500 Energy Sector SPDR ETF (XLE) jumped 2.24% since the Monday low.

While traders may have objections to this legislation, we need to consider the obvious supply/demand equation, as momentum traders started entering positions this week.

Coal miners are on tap. Less we forget, we must also remember the industries that are affected. If the trend in energy continues, industrials and transports will be on the buy list. 

Energy independence will be a hot topic in the days and weeks ahead. As a result, coal miners are showing early buying interest, as it tops the list of energy industry groups in the list below this week.

It’s apparent this short term trend could last for a while, as dip buyers amassed shares of coal and energy shares again on Tuesday. ARLP is ranked #1 by Investors Business Daily stock “check-up” feature, followed by WLB, CNXC, NRP and AGHP.

Peabody Energy was reduced to the pink sheets over the past few years, yet risk takers seem to be interested, as the stock tops the coal producers list on Tuesday. (+16.84%). While this particular candidate is a risky proposition, further confirmation may come in the days ahead, if we see “continuation” through bullish follow through days. A bullish candle today may light a fire in the momentum traders circuit. Monitoring……..for a potential trade.

Westmoreland is showing interest as well, ranked #2 by IBD’s “stock check-up” feature. Volume suggests that the supply/demand equation might be shifting. If price action pushes above 15.50 (likely) a Kirby opens up to previous 52 week highs.

While this topic isn’t meant as a recommendation, I would be remiss if I did not bring it to your attention. We are merely pointing to the obvious conclusion, if coal continues to permeate traders minds in the short term.

Surely there will be pros and cons with this legislation, but in the interim, we as traders need to capitalize on rotation in all of its forms. Currently, King Coal is hot……….. like Las Vegas in summer hot. Ask Jenn, she resides in Vegas. 🙂 Smirk!

Happy Wednesday,