Once again, let's notice that the Market Vectors Coal ETF (KOL) is bumping up against its key near-term resistance line, now at 49.11, which so far has thwarted the upmove off of the most recent pivot low at 45.17.

That said, my near- and intermediate-term work argue in favor of a penetration of the resistance line, which will trigger upside follow-through above 49.85 on the way to 51.50.

At this juncture, only a decline that breaks and sustains beneath 47.75 will indicate that the KOL "needs" another loop to the downside within its larger sideways (bullish) congestion area between 49.00 and 45.00 prior to the anticipated thrust towards 51.50.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.