Trade Idea-Set up (Long Term) KOL

There's a little reading you might want to do on coal and its rend and a very recent change to that trend, you can find that article here

The very recent change in the trend is not yet a new trend, but as we say, "Changes in character lead to changes in trends".

This is US Coal Imports, note the uptick to the far right.

This is just a small part of KOL as it is an ETF that covers the Market Vectors GLOBAL Coal Index which includes not only coal, but assets of the ETF cover production, mining, cookeries, storage and trade and again it is GLOBAL.

As for the charts, this looks to be an interesting long term long position that's late in a stage 1 base and close to stage 2 mark-up with a significant base.

 The 3-day chart of KOL since 2009 is a great example of the 4 trends in a stock's cycle, these tend to be fractal so you can see this same cycle play out on something like a bounce from the current/recent market base to intraday trade, you just have to align you trading/investing style with the timeframe, but it's a great map to know where you are so you have a better idea of where you are going.

2009 market lows sees stage 1 base/accumulation followed by stage 2 Mark-Up/Rally, a clear Stage 3 Top/Distribution and stage 4 Decline before starting all over again. It appears we are at a large stage 1 base right now.

Here are some traditional indicators used in slightly non-traditional ways...

 3-day chart of KOL using a standard Wilders RSI period 14 which is about as high as I want to go, I often use period 6.

Below is a MACD Histogram, but to uncover the trend and isolate the noise I tend to use longer settings of 26/52/9 which shows a positive divegrence at what I suspect is a large base, just as RSI also shows.

At the bottom I use Stochastics for divergences, not overbought/oversold and I use a long period of either 50 or 100, this is 100 and it too shows a positive divergence at the base area.

 The long term 3C chart of 3 days shows 2009 accumulation, some lighter 2010 distribution and very heavy 2011 distribution in to a H&S top followed by a large positive divegrence in the area I suspect is a large base.

That seems to be a bullish strategic view of KOL over the long term which are few and far in between in the current market environment. On a more tactical level...

This is the daily chart, it recently broke out of a range and on volume with quite a bit of volatility.

The 4 hour 3C chart which is a very long term/strong timeframe supports recent 2014 strengthening positive divergences  so if I was looking for a longer term long play that had some staying power (perhaps a year or two, maybe more on the upside), I'd consider KOL.

The 60 min chart shows a positive divegrence just before the breakout from the range so all in all this is looking more and more like it is reaching the end of stage 1.

 As for a tactical entry, KOL is a bit choppy intraday which makes it difficult to analyze on very short term charts, but it looks like this 10 min chart is suggesting a pullback which is where I'd want to enter KOL long.

The 5 min chart which was confirming the price trend has also gone recently negative, again suggesting a pullback. All of the longer term charts would put the probabilities of a pullback being a useful and constructive entry very high.

 On a daily chart I like candlesticks for reversal areas, especially on increasing volume over the previous day such as the bullish hammer to the left and what looks to be a more bearish star today. Taken with the 6/10 min charts, I'd expect a pullback and probably a decent entry in KOL very soon.

This 3-day version of my Trend Channel has held almost all of the trend (even though there has been very little trend other than lateral) for almost all of 2014 so I'd trust it as an initial stop in the $18.60 area on a closing basis, I prefer a 3-day chart's close, but that determination can be made at the time.

I'd also look to the trend channel if/when KOL breaks out to stage 2 Mark-Up or the uptrend, I'd use the appropriate timeframe for the channel and just let this one trend and not try to trade around it much.