“Coal bulls hope the Trump era will continue the black fuel’s recovery rally, with environmental rollbacks increasing production, but that’s not likely, due to the utility sector’s multi-year and multi-billion dollar transition into natural gas, solar power, and other less polluting alternatives. As a result, the sector rally could be nearing its end, with realism and a long-term trading range taking control in coming months,” according to Investopedia.
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Materials equities and funds like KOL have been benefiting from rebounding areas of the mining industry that were previously punished, including gold, coal and steel. Many industrial metals and miners rallied on the belief that China would support growth through stimulus measures, augmenting demand for metals while enticing investors to jump back in.
KOL “uilt a head and shoulders topping pattern into an August 2011 breakdown, yielding a downtrend that initially found support at the 2010 low in the upper 20s. A bounce into 2012 posted a lower high, with the subsequent decline breaking support a few months later. A channeled decline then took control, with steady losses continuing into the second half of 2014,” adds Investopedia.
VanEck Vectors Coal ETF
