On December 20, we purchased Guggenheim Shipping ETF ($SEA) at $20.39 on a base breakout. On the chart below, note the big volume over the past two weeks:



The strong volume confirms the recent breakout and signals that $SEA may be ready to move significantly higher through the first six months of the new year.

Along with $SEA, Nikkei 225 Index ETF ($NKY), PowerShares Golden Dragon China ($PGJ), and Global X FTSE Greece 20 ETF ($GREK) have formed bullish chart patterns. We recently bought $PGJ in the ETF portfolio on a downtrend line breakout above the 50-day moving average.

After a four-month rally off the lows, Market Vectors Coal ETF ($KOL) stalled at resistance of its declining 40-week moving average. After a few weeks of chop, $KOL also broke the uptrend line of the rally and closed below the 10 and 40-week moving averages.

The 10-week moving average of $KOL has also lost momentum, as it is beginning to turn down after going sideways for a few weeks:



$KOL has been in an ugly downtrend since August of 2011, and has been unable to climb back above the 10-month moving average, which is much like the 200-day moving average on a daily chart. A breakdown below low of the current base could lead to a test of the 2009 low around $12:



A bounce into the declining 10 and 40-week moving averages on the weekly chart could make for a low-risk entry point on the short side (for those interested). However, with our market timing model on a clear buy signal, we are not looking to initiate short positions at this time.

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.