Arch Coal, Inc. is engaged in the mining, processing,marketing and transportation of bituminous coal in the domestic steam market. For the FY ended 12/31/00, total revenues fell 10% to $1.40B. Net loss before accounting change fell 96% to $12.7M. Revenues reflect the temporary idling of the West Elk mine in Gunnison County, Colorado. Lower loss reflects the absence of a $364.6M charge related to the write-down of impaired assets.

April 5, 2001

Arch Coal Incorporated (ACI) produces steam and metallurgical coal from surface and deep mines primarily located in the central Appalachian and western regions of the U.S. The company offers its coal for sale to utility, industrial and export markets. Energy stocks are hot right now, but ACI is simply on fire. Looking at the daily chart, shares have been moving higher from a mid-December low of $9.37. Support has been strong at the 5-dma of $29.70 and has presented a number of quick entry points over this period. After testing this level once again during today’s trading session, shares now look poised for higher ground. Today’s rally did set an intraday new high of $32, as ACI broke above previous resistance set back on 3/28. Volume was impressive, as ADI traded 51 percent above its normal average daily volume. On a technical basis, all of the short-term readings look great. Relative strength and momentum are pointing higher, with the MACD bouncing off its lower moving average line. Today’s close is also of interest, as shares finished right at the previous all-time high. We also think that ACI could be fueled by strength in the broader market should today’s sharp market rally continue. We do believe, however, that there could be some short-term selling, given the 402-point pop in the Dow. As far as playing ACI, we’ll look for a run above today’s intraday high of $32 or a pullback to the 5 or 10-dma of $28.95 to signal possible entries. Our stop is just under the 10-dma at $28.25.

Picked on April 5th@ $31.50
Change since picked 0.00
Stop Loss @ $28.25