Arch Coal Inc. (NYSE:ACI) Can Make Some More Short-Term Gains

[[tagnumber 0]]Arch Coal Inc. (NYSE:ACI) tried to rebound yesterday after the stock hit the bottom on the reversed stock split that became effective on Tuesday. The company‘s market valuation is also at a record low but the second quarter report filed last week did not give reason for optimism.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]ACI closed the last trading session at $1.31 for a share and with a massive gain of almost 25% from the previous close and again above average trading volume of over 1 million traded shares. Not only the share price of ACI has hit a new bottom this week, technical indicators on the chart are also near the lowest levels, meaning the upward correction could continue today as well.[[tagnumber 1]] [[tagnumber 0]]A press release came out yesterday afternoon that could limit ACI potential gains on the stock market today. According to the announcement, the U.S. Environmental Protection Agency has reached an agreement with ACI under which the company has taken the obligation to conduct substantial operational and management upgrades to ensure compliance with the Clean Water Act.[[tagnumber 8]][[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]In addition, ACI will have to pay a $2 million civil penalty and there could also be further financial penalties in case of other violations by the company. That sounds like really bad news, especially considering the current conditions on the coal market where there is immense downward pressure on prices from the strong US dollar and the competitive foreign suppliers.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]ACI second quarter report showed further decline in the company‘s revenue and a much larger net loss. During the last quarter, the company has reported over $19 million in impairment losses resulting from advance royalties that will not be recouped, again as a result of expected lower sales volumes and prices.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]This week, ACI also completed the exchange of its old senior notes for new ones plus a cash payment, along with the 1–for–10 reverse stock split that reduced the number of outstanding shares to 21.3 million.[[tagnumber 1]] [[tagnumber 22]] [[tagnumber 1]]