WLT 15 min Oct 2nd

WLT 15 min Oct 2nd

The WLT (Walter Energy Inc) Active Long is trading higher on speculation that BHP Billiton could be looking to take it over. As a few days have now passed since the last update listing the first target (T1) as the first of the downtrend line OR the 2.60 level (just shy of horizontal resistance), I am revising the first target to the 2.64 level (a bit closer to horizontal resistance) and eliminating the downtrend line as a target since the gains would be considerable smaller at this point with the downtrend line coming in much lower than a few days ago.

Also keep in mind that WLT continues to have the potential to morph into a longer-term swing trade or investment but I have yet to see sufficient evidence of a reversal to add WLT to the Long-Term Trades category at this time. Takeover rumors are great but gains from such speculation can be quickly wiped out & then some if they prove to be false rumors. Even if the BHP takeover rumors prove to be true, I’d like to see technical evidence of a meaningful reversal in most of the other US coal stocks before adding these as Long-Term Trade ideas as today’s bullish price action in WLT is news driven vs. supply & demand driven (i.e.- natural buyers finally starting to overwhelm natural sellers without any unforeseen catalyst for the buying/short-covering).