Thursday, March 18, 2010

Bookkeeping: Restarting Alpha Natural Resources (ANR)

We've been discussing coking coal a lot of late, and when I sold Potash this was one sector (the other being iron ore) I wanted to offset that sale by going into.  However, the stocks involved have simply been on fire, and most days you have to chase just to be involved.  Of the major met coal stocks, Alpha Natural Resources (ANR) is the one that has lagged a bit, and is now the closest to a support area so I will throw in the towel and "kind of" chase it here around $50.50.  I am beginning with only a 1% allocation - I'd rather buy more in the $46 to $49 range but at this point it's a victory to buy anything even at the 10 day.

As the chart below shows even the "laggards" in this sector you have to chase around the 10 day moving average because they won't even fall to the 20 day. When this market finally does correct this type of company will have some days it loses 8% in a session.

ANR was once our largest position - in fact there was a buyout for the stock when it was our top position, but in a wicked twist of fate the largest shareholder wanted nothing to do with the acquisition so I was lucky enough to own a stock that went down after a buyout offer.  It's been a while since we've owned it.

As for the greater market - just another groundhog day.  At some point you'd expect the market to at least pullback to mid 1150s or something to create some opportunities for purchases, but we only fall 0.2%.  Hence similar to what we saw a week or two ago, the market is working off oversold conditions by just going sideways rather than down.  Before the next grind up.

I am lemming, hear me roar.

[Jul 31, 2009: Alpha Natural Resources  Finalizes Foundation Coal Deal to Secure #3 Spot in US]

Long Alpha Natural Resources in fund; no personal position 


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