Merrill Lynch Downgrades Peabody Energy (BTU) and Consol Energy (CNX)

I was wondering why the stocks were down in the coal sector and it looks like an analyst downgrade. Unfortunately, the stocks are not down much (only 4%) - I've cut back on these positions quite a bit after they were top 10 positions simply to lock in profits after some huge runs. I am hoping for more severe cutbacks in the stock price in the relatively near future so I can add more - with the growing global imbalance in energy supply/demand I remain a long term bull and will remain so come recession or not. I am going to remain patient and hoping that a general market pullback will push these 2 down to my buy targets. In the interim, I have been adding to Massey Energy (MEE) instead which is focused on metallurgical coal and has been nearing some support levels. I am not as bullish on this one as the former two since its more reliant on industrial usage and steel.... which could see some slowdown....

• Investors pulled back from U.S. coal producers Wednesday after a Merrill Lynch analyst downgraded two of the largest domestic miners. Merrill analyst David Lipschitz cut shares of Peabody Energy Corp. and Consol Energy Inc. to "Neutral" from "Buy," saying the stocks are trading close to their peaks.
• Howald said growing Asian demand made 2007 "one of the most prolific periods ever in the coal industry," which sent the sector's stocks soaring in the second half of the year. China and India represented 20 percent of total global coal consumption in 1980, and are expected to account for 60 percent by 2030, he estimated.
• And as international demand soars, the analyst predicts an impending shortfall in U.S. supplies of steam coal -- used to produce electricity -- and a subsequent surge in prices. (more good news for US consumers, not that it would cause inflation or anything - at least note CORE INFLATION)
• Howald noted that the volatile sector may allow for some buying opportunities for investors going forward. Stifel Nicolaus analyst Paul Forward raised coal price expectations for U.S. coal miners, following a recent rise in prices and a better-than-expected supply and demand balance for the coming years. He maintained his "Buy" rating on Consol Energy Inc., Massey Energy Co., and Peabody Energy.
• Forward kept other major coal producers at "Hold," but noted that a further rise in coal prices could support an upgrade to "Buy" in the future.

Long all 3 names in fund; long none in personal account