The Coal Bulls Are Charging

Coal stocks took off on December 5 following some positive news out of China. Coal bulls have been watching China and waiting for an excuse to charge, but with the global economic recovery still slow, so far good news has only amounted to speculative price gains.

How Fast are the Bulls Running?

Trading at normal volume, Alpha Natural Resources (NYSE:ANR) was leading industry gains, climbing over 11 percent in the afternoon. Arch Coal Inc. (NYSE:ACI) climbed over 8 percent, followed by Walter Energy (NYSE:WLT), which climbed just over 7 percent toward the end of the day. Even James River Coal Company (NASDAQ:JRCC) added a few cents, just over 2 percent, to its share price.

It’s important to frame this pop in coal stocks against the industry’s recent performance. Anyone with an eye on the coal market knows that coal companies have stock charts that look like the outline of roller coaster tracks and massive one-day gains have come and gone in the past.

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For example, over the past month, shares of Alpha Natural Resources have fallen 22 percent, while over the past three months they are up over 29 percent. Looking further back, they are down over 29 percent for the past six months. ANR shares this kind of up-down history over the past few months with many other coal companies…