Arch Coal (weekly)

The first impression of this chart is one of “I’ve fallen and cannot get up.” This was a dramatic 87% collapse in a very short period of time. The move off the lows has so far been uninspiring and “corrective” in a nature. It’s interesting that ACI has failed to best the 23.6%* retracement, which also aligns with a classic chart resistance/support zone dating back to 2006 and 2007.

Arch Coal (Weekly)

For Arch Coal, there is a clear area of resistance between 26.23 and 27.76 that must be cleared before this stock can really take off.

27.76

*23.6% is the Sq.Root of 61.8%

Andy’s Technical Commentary__________________________________________________________________________________________________

Arch Coal (Daily) ~ Log Scale Support and Resistance

Whenever a stock or a market sees the kind of enormous drop seen by ACI, it’s good to observe it through the lens of a log chart. The bounce from 10.43 looks a little more impressive. The key Fibonacci retracement levels of 50% and 61.8% (in log terms) come in at a 28.41 and 36, respectively. So, picking up from the previous page, we should include $28.41 as part of the “zone of resistance.” If ACI, can clear 28.41, a further rally to $36.00 would seem likely for a 27% gain.

19.86

10.43

ACI Longs (Bulls) should consider 19.86 as support. There is classic chart support/resistance at that level and it also coincides with the 38.2% retrace of the entire move up from 10.43

Andy’s Technical Commentary__________________________________________________________________________________________________

Arch Coal (Daily Log Scale) ~ Elliott Wave Count (B) “c”

This would be the bearish interpretation of the price action and it is my preferred model. It does count out quite well as a completed “zig-zag” correction. The “c” was equal to “a” in % terms. In terms of duration, the “c” was (“a”+”b”)/2. Also, the proposed (B) wave has now been twice as long as the initial (A) wave down, so this corrective action has met some good duration targets for a (B) wave.

5 25.86 3 R. Shoulder?

L. Shoulder?

“a” 5

Head?

b -c-

-24

1 3

-b-1-

-a-

1

H&S Target =~$17.50

-4-

4

2

-a-3-5-b-

c “b”

-c2

10.43

a

It will take a break below 19.86 to buttress this bearish case. It would also be nice to see a “five wave” development from the peak, which is not yet evident. If a (B) wave did conclude at 25.86, then the downside targets would be $7.50 for a 61.8% of (A)=(C) in log terms, or $3.36 for (A)=(C) in log terms.

(A) Andy’s Technical Commentary__________________________________________________________________________________________________

Arch Coal (Daily Log Scale) ~ The Alternative Bullish Model

This would be the alternative bullish case for ACI, that it’s in the first stages of a “c” wave coming out of a triangle “b” wave. It’s tough to get behind this model because how long this wave-2 is taking relative to wave-1.

1

“a” 5

b -c-

2

d 3

-b-a-

1

e “b” 4

-a-

c -b-c2

a It would take a break below $19.46, the 61.8% of wave-1, to completely discredit this model.

10.43

(A) Andy’s Technical Commentary__________________________________________________________________________________________________

Arch Coal (Daily) ~ Exponential Fibonacci Moving Averages (55, 89, 144, 233) Presented here are some exponential moving averages on ACI. This is actually an interesting moment for the stock because all of the “faster” averages are close to breaking above the 233d EMA. According to some technicians, this would be a bullish signal and a longer term “buy” signal. A break down below the 55d EMA at 20.46 would look bearish form this perspective.

Andy’s Technical Commentary__________________________________________________________________________________________________

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