While the major stock market indices are near all-time highs, this can not be said for stocks in the Coal or Shipping sectors. Whoa, they have been smoked over the past few years.
BUT, the Coal and Shipping sector ETFs are showing technical signs that they may be ready to move higher.
The Coal Sector ETF (KOL) declined 65% over the past 4-years, while the Shipping Sector ETF (SEA) is about a third lower than it was 5 years ago. Neither of them have been good to own for buy and hold investors over the past several years.
But both ETFs are forming potentially bullish price patterns. KOL is just above a 4-year falling support line and may be forming a bullish falling wedge pattern. This pattern typically has about a two-thirds chance of an upside breakout. This week KOL is making an attempt to break the top of its falling wedge pattern. This has not occurred yet, so patience is warranted.
Shipping stocks have been sinking in recent years as a well, as a slowing / uncertain global economy has made life rough on them. The Shipping sector ETF (SEA) appears to have formed a bullish ascending triangle pattern over the past few months. This pattern also has about a two-thirds success rate (of higher prices). Should SEA break above the $19.70 level it could run to the upside for a while. A measured move projects a 15% rally if it breaks out (and holds).
While these two sectors may not be “buy and hold” candidates, they should be on your radar as prospective intermediate-term trading setups. Have a great weekend and thanks for reading.
Follow Chris on Twitter: @KimbleCharting
Author does not have a position in any mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.