In a stock market short on bullish charts, investors are looking at coal stocks, where several are near buy points as the Iran conflict boosts demand for coal. IBD's coal industry group is up 15% this month, after surging crude oil prices sparked demand for substitutes.

The benchmark Newcastle coal index is up nearly 17% this month, to the highest since November 2024, according to FactSet. Restricted access through the Strait of Hormuz has sent crude prices above $100 a barrel.

Among coal stocks, Alliance Resource Partners (ARLP) broke out above its 27.83 buy point on March 19 and remains in a buy zone, with potential to 29.22. The No. 2 coal producer in the Eastern U.S. supplies domestic and international electric power generators.

The same day that Alliance broke out, Core Natural Resources (CNR) cleared a 103.50 buy point. Core Natural, formed from last year's merger of Consol Energy and Arch Resources, is one of the largest coal exporters to Asia.

Peabody Energy (BTU), which has operations in Australia, is quite near the 39.95 buy point of a base-on-base pattern. Switzerland-based Glencore (GLNCY) is getting closer to the 14.67 buy point of a nine-week-old base. The relative strength line is at new highs already.

Glencore is one of the world's largest producers and exporters of thermal and steelmaking coal.

Europe's surging natgas prices and restricted LNG supplies to Asia should benefit Cheniere (LNG), the world's second-largest producer of LNG, Venture Global (VG) and NextDecade (NEXT). Simon Lack, portfolio manager of the Catalyst Energy Infrastructure Fund (MLXAX), said that although these stocks have rallied based on Qatar stopping exports, the market hasn't fully appreciated that over the long-term Qatar is now a more risky supplier.

Because contracts run 10-20 years, any Qatar customer has to weigh the risk of another disruption in the future.

Many Asian countries are shifting to coal due to disruptions in LNG supply. Officials in Japan will relax restrictions on coal-fired power plants for one year in the fiscal year starting April, Reuters reported. About 6% of Japan's imports of liquefied natural gas (LNG) travel via the Strait of Hormuz.

Bangladesh is increasing coal-power generation and coal imports, according to Reuters. The Philippines is increasing coal-fired power while cutting LNG-fired output. Vietnam and Thailand are also looking at coal to substitute for LNG.