Could investors clean up with this dirty share?

TL;DR

Coal, despite being despised for its negative environmental impact, has seen a resurgence in demand and prices, making it a potential investment opportunity.

Transcript

hello it's John Burford with chart of the week for Monday the 3rd of October and today I'm covering um a much despised sector coal yes Cole um it has become a pariah over the last few years in the net net zero campaign um but um I will describe how it has come back to life as a real opportunity now the this is the chart going back to 2000 and um la... Read More

Key Insights

• 🙈 Coal, though widely criticized, has seen a resurgence in demand and prices, presenting potential investment opportunities.
• ❓ Peabody, a coal company, experienced a rally in its share price, defying expectations of decline.
• 😮 Global coal consumption continues to rise, contributing to the upward trajectory of prices.
• ❓ Independent analysts predict a continuation of significant increases in coal consumption and prices.
• 🤩 The footsie chart, in contrast, highlights a bearish outlook, with failed attempts to reach new highs and the breaking of key support levels.
• ❓ The footsie's future bounce is expected to be weak, due to a significant supply of overhead resistance.

Questions & Answers

Q: Why has coal been despised in recent years?

Coal has become despised due to its strong association with both environmental degradation and carbon emissions, making it a symbol of a non-renewable and polluting energy source.

Q: Why did Peabody's share price rally after hitting a low point?

Despite being derided by the ESG movement, Peabody's share price rallied due to the ongoing demand for coal in various parts of the world, which led to increased prices and profitability.

Q: Are analysts optimistic about the future of coal consumption and prices?

Yes, many independent analysts forecast significant increases in coal consumption and prices, indicating a positive outlook for coal companies like Peabody.

Q: What could signal a need to reconsider investments in Peabody?

If the share price falls below the $20 mark, it may be worth reassessing investments in Peabody, as it could indicate a shift in market dynamics.

Summary & Key Takeaways

• The chart illustrates the resurgence of coal as an investment opportunity, with Peabody, a coal company, experiencing a significant rally after hitting a low point in November 2020.

• Global coal consumption and prices have continued to rise, defying expectations of it going out of style.

• Independent analysts predict further increases in coal consumption and prices, making an investment in Peabody favorable.