CONSOL Energy Inc. engages in the production of bituminous coal. It focuses on the extraction and preparation of coal in the Appalachian basin. It operates through Pennsylvania Mining Complex segment, which consists of mining, preparation, and marketing of thermal coal, sold primarily to power generators…
Take a look at the 1-year chart of CONSOL (NYSE: CEIX) below with added notations:
After hitting $10.00 as resistance twice over the past year (green), CEIX has now broken above that level, while also hitting a new 52-week high. Overall higher prices should be coming, but if the stock pulls back, the $10.00 level should now provide potential support.
The possible long position on the stock would be on a pullback down to the $10 level with a stop placed under it. A failure to hold $10.00 could negate the expectations for a higher move.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT