James River Coal Company (JRCC)

Company

"James River Coal Company mines and sells bituminous, steam and industrial-grade coal through six operating subsidiaries located throughout Eastern Kentucky and Southern Indiana. We are the sixth largest coal producer in Central Appalachia and the third largest in the Illinois Basin." (company website)

JRCC 1-year chart
JRCC 1-year chart

Buy

JRCC 2-month chart JRCC 2-month chart

When James River Coal released earnings earlier this month, they reported a loss of .99 per share, versus Expectations of a .35 loss. The stock has been in a downtrend for the past year, and I expected this to be the nail in its coffin. Surprise! The stock has started moving up nicely. Go figure!

  • Price momentum (PPO) — picked up sharply beginning in January
  • Trend (ADX) — pretty weak (below threshhold) but buying pressure (+DI) has crossed above selling pressure (-DI)
  • Money flow (CMF) — a recent inflow after strong outflow for most of the last year
  • Relative strength (RSI) — above neutral and rising
  • Volume — started increasing in Aug-06, now double volume then

Based on technical analysis, MarketEdge calls JRCC a "strong buy" in a "weak upward trend."

Sell

gain Bottom line
14%

JRCC has had a terrific run up for the past three days on very heavy volume. Today's decline is probably what The Street calls "profit taking" — which seemed like a very good idea to me. Everything about the chart is still very strong, but JRCC has been stretching up the upper Bollinger band for about two weeks. It's likely to come back, perhaps even below the price I bought at. Profits are good.