Peabody Energy (BTU) is a Coal Mining company that has been brutally annihilated by the bears since April 2011. The stock is down approx. 80% since its high of $73.95 on April 4th, 2011. The fundamental case for BTU and the coal mining industry is pretty weak, given the strict carbon emission standards that are being implemented/enforced around the world, and the non-existent economic recovery. My bullish case for BTU is strictly based on Technicals and as such, I believe that BTU might have officially hit a bottom, and is about to kill the shorts.
Here is a daily chart of BTU:
The stock has broken out of its Bearish Channel.
My price target on BTU is $22.
Here’s my trade on BTU:
Buy Mar ’14 Calls on BTU @ 17 Strike
The Calls are currently selling for $2.75
If BTU hits my target of $22 before Expiration, you can easily make a profit of approx. 100% on this Bullish trade. Not bad if you ask me.
Price Target: $22
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