Amidst rumors that Carl Icahn has a stake in coal play BTU, the stock rallied sharply and is now reversing lower after Mr. Icahn denied that he owns any shares.
Beyond the rumor mill, though, is the more important issue as to whether the coals are truly bottoming within the context of a painful, multi-year downtrend.
For reference, consider the monthly chart, below. You can see those 2009 crash lows being probed, once again. And the main point here is that, regardless of whether or not Icahn plans to take a position in BTU, the sector should be using any bit of news, whatsoever, even apparently negative news, as an excuse to rally from a true bottom–For that is the stuff out of which real bottoms are made.
Indeed, a close below $20 today in BTU would be a terrible omen for the rest of the sector.
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I think in this market that really tries to probe the future, investors are starting to tilt towards greener technologies. And so while coal may have been dismantled past “fair value”, I can’t see it ever getting the oomph to really re establish itself in the world we live in. Money invested in coal is dead money, imo.