Wonders never cease with this market. Every weekend, I look at the charts, searching for anomalies, for things that make no sense, technicals that have you scratching your head -- saying "What the heck?"
For several weeks now, I kept coming back with Joy. The fabulous-looking chart of Joy Global (JOY) , that is -- the company that makes and services mining equipment that's principally used for coal.
I did nothing with it. What was there to do? The coal mining business has been going away for years, both here and overseas - including in China, where it has a ton of business. There are only a handful of publicly traded companies that have anything to do with coal. After an amazing spike in 2010 to 2011 -- the coal supercycle, according to Peabody Energy (BTUUQ) , which was the largest coal concern at the time -- many firms have since filed for bankruptcy, including Peabody. Musk Manifesto or not, we know there aren't going to be any new coal plants built in this business.
So without a reason to buy, I dismissed it week after week. I thought the chart was lying.
Now I know why. It had to have been the chatter of a potential takeover, which was made manifest today with Komatsu's (KMTUY) $28.3 per share bid for this venerable machinery maker.
I used to have Joy's former CEO, Mike Sutherlin, on the show all of the time in the old days of Mad Money.
Joy and Bucyrus International, which was bought at the top of the cycle by Caterpillar (CAT) , Komatsu's arch-rival, have been locking horns in this market for years. When CAT snared Bucyrus for $7.6 billion -- Komatsu is paying a little more than half that figure for what I think is the superior competitor -- I know that Joy looked like it was a goner. If you liked Bucyrus, you loved Joy, which had a much better after-market business that amounted to an annuity stream.
But coal collapsed. And Joy, which was at $77 at the time of the Bucyrus bid and then rallied to $102 on the coal hoopla, began the long fall that ended at around $9 this year. Joy is now in the mid $20s.
People shorted it all the way down and all the way back up -- 17% is short. Talk about a time to cover.
Now Komatsu is in there with Joy's clients, giving them the rest of the business -- which is not dumb, because people still use coal.
But more important for me, at least, the mystery is solved. It wasn't errant buying. It was accumulation.
The charts don't lie, after all.