NEW BULLISH Plays
Walter Energy Inc. - WLT - close: 15.85 change: +0.64
Stop Loss: 14.95
Current Gain/Loss: unopened
Entry on October -- at $--.--
Listed on October 15, 2013
Time Frame: 4 to 6 weeks
Average Daily Volume = 6.7 million
New Positions: Yes, see below
Why We Like It:
Coal stocks have been crushed in recent years. Worries over stronger regulation and a world that's trying to use less coal (due to pollution) has hammered the sector lower. Shares of WLT have fallen from $140 in 2011 to $10 a share just a few months ago. Fortunately, it looks like all the bad news has finally been priced in. WLT formed a bullish double bottom with its $10 lows in June and August. More recently WLT has spent most of the last six weeks consolidating sideways in the $14-16 zone.
Today saw shares challenging resistance at $16.00 and its 150-dma. A breakout higher could spark a serious short squeeze. The most recent data listed short interest at 33% of the 59 million share float.
Today's high was $16.18. The 100-dma is at $16.13. I am suggesting a trigger to open bullish positions at $16.25. If triggered our target is $19.50 but we will plan to exit prior to WLT's next earnings report expected in early November.
FYI: The Point & Figure chart for WLT is bullish with a $25.00 target.
Trigger @ 16.25
Suggested Position: buy WLT stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the NOV $17 call (WLT1316k17) current ask $0.85