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Coal Stocks Rally on Romney Election Hopes


Arch Coal and Peabody Energy advance following the first presidential debate.

When he was elected President of the United States in 2008, Barack Obama promised to make America the new progressive world leader on clean energy initiatives and alternative fuels. While this news was viewed as beneficial to firms that offered wind, solar, and ethanol as a form of energy, mainstays such as oil and coal were shunned in fear that new primary sources would be found.

Taking a look at the weekly charts of bellwether names such as Arch Coal Inc (NYSE:ACI) and Peabody Energy Corporation (NYSE:BTU) since mid-2007 clearly shows that the current market environment isn't exactly ideal for profitability within the industry. Granted, the highs made in 2008 were right in front of the broad-market bubble, but the fact that these names failed to sustain their post-bubble bounce is obviously not a great sign for bulls.

While these names have been a graveyard for money since early 2011, there are hopes that such companies could be setting up for a sharp bounce. One change in policy could dramatically shift the nature of the industry, and comments made by Mitt Romney at the first presidential debate have hopeful coal bulls on their toes. Romney declared that the government was wasting a great deal of money on alternative energy, and that he supported clean coal initiatives as primary sources of energy.
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