As Europe Scrambles for Power, One Coal Stock Quietly Stands Out
From both a technical and fundamental perspective, this U.S. coal producer is heating up amid uncertain times.
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European Commission President Ursula von der LEYEN
“In 1990, one third of Europe’s electricity came from nuclear. Today it’s only close to 15%. In hindsight, it was a strategic mistake for Europe to turn its back on a reliable, affordable source of low-emission power”.
- EU Commission President von der Leyen, Nuclear Energy Summit
When Germany closed its last three operating nuclear power plants in 2023, it was considered a positive. Safety concerns, combined with a commitment to renewable energy, made it a popular decision.
This year, European liquified natural gas prices skyrocketed. Yesterday, I wrote about natural gas stocks, specifically about the effects of the closure of a major LNG gas production and export center in Qatar.
The Las Raffan Industrial City is the world’s largest export complex for liquified natural gas, accounting for about 20% of the total global supply of LNG. The complex is well within range of Iran’s missiles and drones, and its main method of distribution is via the Strait of Hormuz.
Is Coal the Answer?
With LNG prices climbing, and nuclear energy kneecapped, Europe is running out of options. That's why Europe, along with countries like Japan and South Korea, is now turning to coal.
As a result, the price of coal has risen sharply. Newcastle coal futures have gained 22% year to date, despite a sharp drawdown over the past two days.
With coal prices moving higher, it’s natural to assume that the price of coal stocks could follow.
We sifted through the charts in the coal sub-sector to determine which names show the greatest potential for both short-term and long-term gains. After careful study, one name stood out.
Alliance Resource Partners
Alliance Resource Partners (ARLP) is already off to a great start in 2026, gaining over 18% year to date. On Tuesday, ARLP closed at its highest level since July, and is rapidly approaching its six-month high of $28.14.
Shares of the Tusla, Oklahoma-based master limited partnership recently experienced a bullish crossover (circled), when its 50-day moving average (blue) crossed above its 200-day moving average (red).
Alliance Resource Partners' only technical negative is a nearby resistance level at $28.14 (black dotted line). We’re a buyer of ARLP, but we don’t want to make a full commitment unless and until it can overcome that $28.14 obstacle.
Here’s the Play
I’m taking a small position in Alliance Resource Partners at current levels, and will add to the position on a close above its July highs. ARLP's 8.75% dividend yield should act as a cushion against any pullbacks.
Related: Are Natural Gas Stocks About to Heat Up?
At the time of publication, Ponsi was long ARLP.
