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).