For months the pros have been saying if there’s one energy trade to avoid it’s coal. That is until now.
Esteemed commodity pro Dennis Gartman says coal has gotten so bad, it’s actually good.
“Nobody likes it even slightly – it’s been under pressure from all fronts,” says Gartman.
And it’s exactly that kind of market environment that, time and again, signals a turn.
But, in addition to absolutely terrible sentiment, Gartman also thinks fundamentals are starting to favor coal.
“People have been saying that with nat gas so low, power generators would switch from coal to nat gas. But now nat gas is starting to climb a little.”
Gartman thinks that will dissuade any more power generators from making the switch – at least right now.
“That’s a simple thing,” but sometimes a simple thing is enough for a trade.
At current levels I’d look at the KOL, says Gartman.
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Posted by CNBC's Lee Brodie
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Trader disclosure: On August 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Weiss is long VZ; Steve Weiss is long T; Steve Weiss is long JPM; Steve Weiss is long WLP; Steve Weiss is long DGX; Steve Weiss is short JCP; Steve Weiss is short X; Joe Terranova is long SEPT. MINI S&P FUTURES; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long USB; Joe Terranova is long GS; Joe Terranova is long WFM; Joe Terranova is long JPM; Joe Terranova is long YHOO; Joe Terranova is long SBUX; Joe Terranova is long AAPL; Joe Terranova is long EMC; Joe Terranova is long NXPI; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU
For Dennis Gartman
Dennis Gartman is long GOLD in YEN TERMS
Dennis Gartman is long Natural Gas
For Jeff Kilburg
Nothing to Disclose
CNBC.com with wires.
