Coal stocks have been rather weak on a year-to-date and a year-over-year basis. This weakness is reflected by the Market Vectors Coal ETF (KOL) -- a basket of coal stocks -- which is down over 3% year-to-date and nearly 39% over the past year. Today, I'd like to show you two names in this industry that look ready to resume their respective downtrends: Peabody Energy (BTU) and Alpha Natural Resources (ANR).

Peabody Energy Corp. (BTU)

• Extremely weak -- down nearly 10% year-to-date and 55% year-over-year
• Possible bear flag breakdown could be sign of new leg down
• 16 out of 19 analysts rate the shares a "strong buy"
• Open interest is skewed to the call side: 136K calls vs. 76K puts, which ranks at an extreme reading of 95%
• Over the past 50 days, there have been 2.5 calls purchased for every put
• Combination of weak technicals and strong optimism = continued downside

Alpha Natural Resources (ANR)

• Very weak underperformer -- down more than 23% year-to-date and 73% over the past year
• Appears to be already breaking down from its bear flag technical pattern, indicating resumption of downtrend
• 15 out of 20 analysts rate the shares a "strong buy"
• Option open interest stands at 117K calls vs. 101K puts
• 50-day buy-to-open call/put ratio is at 4.20, its most extreme level in the past year
• Reports earnings before the market opens on Thursday, May 3