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Stock Watch
Market Watch
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Technical Trading Alert
Tony Golan
Chief Technical Analyst
StockProfit.com™
 Zoom
Peabody Energy Corporation (BTU) is starting a strong new long-term up-trend. The stock is making higher highs and higher lows above a rising 200-day moving average (the red line in the chart above). Relative Strength Differential (RSD), our proprietary indicator for selecting super-strong stocks (the green histogram on the above chart), is now well above the 25% threshold line, indicating BTU is now moving fast enough to be considered as a candidate for a buy.
BTU started the current long-term up-trend when it hit a low of 45.00 in late March, marked as point 1 on the chart. From there, BTU rallied to a new high of 71.28 in late April, labeled as point 2 on the chart. BTU pulled back, made a higher low, and turned back up. On Thursday, point 3 on the chart, BTU rallied to a new high with a long white candlestick and above-average, rising volume, closing near its high of the day.
At a new high, this setup is good for a daytrade only. Daytraders would want to buy BTU only when it goes .02 above Thursday's high, but not if it gaps up or triggers in the first 30 minutes.
Therefore, if BTU doesn't go above 77.16 before 10am EST Friday morning, place an order to buy BTU at 77.16 Stop Day. Then, as soon as your order is filled, immediately place a stop order to sell BTU .03 below whatever the low of the day is at the time the order triggers. Then, if the stock continues to rally throughout the day, keep raising your GTC sell-stop until the stock gets sold automatically or exit your position at the close.
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Disclaimer: Copyright© 2008 StockProfit. All rights reserved. StockProfit is an independent electronic publication providing information on select public companies. StockProfit is not a registered investment advisor or broker-dealer. There is a risk of loss in all of trading. Past performance is no indication nor guarantee of future results. The information contained herein is believed to be accurate.This update is provided as an information service only, and the statements and opinions in this update should not be construed as an offer or solicitation to buy or sell any security. In no event shall StockProfit and/or its publisher, Pan American Relations, Inc. or any of its employees or affiliates, be liable for any direct, incidental, consequential, indirect or punitive damages whatsoever arising out of the use of the Information, or for any errors or omissions in the content thereof, including, but not limited to, from any investment loss, damage or expense incurred by any investor resulting from the Information, or from the purchase or sale of any profiled company or any company which we make commentary. We recommend using good-'till-cancelled stop orders to minimize losses in the event of an adverse price movement. We have not been compensated by company(ies) mentioned above in any way. We do not hold any positions whatsoever in the above mentioned company(ies).
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