International Coal Group (ICO)

Company

"ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 11 active mining complexes, of which 10 are located in Northern and Central Appalachia and one in Central Illinois. ICG’s mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States." (company website)

ICO 3-month stock chart

Buy

A steep downtrend bottomed in the fall, and ICO is now rising (see sidebar). In early December, the price and volume jumped on news of a management buyout, denied by the company. The 50-day moving average has turned up, and the last pullback ended well above the previous low.

  • Price momentum (PPO) — increasing
  • Trend (ADX) — buying pressure had been picking up, even before the rumors
  • Money flow (CMF) — modest outflow
  • Relative strength (RSI) — growing stronger over the three-month period
  • Volume — slight increase in volume during December

Sell

gain Bottom line
2%

Historically, the Santa Claus rally extends into the first two or three days of the new year — and it did, for all my other holdings except ICO. It began dropping precipitously this morning, and I decided that I simply would not allow the first trade on the books for the new year to be a loss. So I sold at a small profit.

MarketEdge still has ICO a "strong buy," and the uptrend still looks intact (see sidebar). But you can't argue with a sudden price drop. The only news I can find is a report of a couple of weeks ago that the mild winter is dampening the prospects for coal companies. I'll see how things look next week when the post-holiday let-down is let down.