Bought to open CLD


Bought 4,000 shares of CLD at $2.147. Total cost including commission is $8,595.99, or $2.149/share.

price target

My first price target for this stock is $2.75.

stop loss

I am willing to risk 30¢ to make 60¢.

time frame/catalysts

If it's going to happen, it'll happen now!If it's going to happen, it'll happen now!


I entered this position with the idea that I needed some additional energy exposure. First, I am looking to get out of the offshore-related RIG and TDW positions in the near term. Second, since energy is the most beaten down sector I expect it to participate disproportionally in a 2H 2016 market rally, should one materialize. CLD is a beaten down coal stock. Their coal mines are in the Wyoming Powder River Basin, and as such are disadvantaged compared to Appalachian coal, in terms of energy content and market access. On the plus side, CLD is financially in much better shape than most other coal companies (to the extent that those aren’t yet bankrupt). I see two potential short-term catalysts: First, the 200day SMA is likely going to get tested for the 3rd time in the next couple of days. If that happens, I think the stock has a good chance of breaking through that resistance with a substantial price extension. Secondly, the Southeast and East Coast states are bracing for record heat, which means there will be elevated power usage for air conditioning, which is supportive of natural gas. Coal companies are by nature levered to the natural gas price. So CLD seems like a potential beneficiary. Still I am keeping the size very small, since this is clearly a speculative trade.

Last Morningstar note on CLD, before they dropped coverageLast Morningstar note on CLD, before they dropped coverage

July 6, 2016 at 7:10pm · CLD · buy to open · stocks

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