Should I Invest in Fording Canadian Coal Trust?

So I started looking for potential income trusts to invest in my RRSP and came across this interesting two year chart for Fording Canadian Coal Trust (FDG.UN-T):


It looks like a very nice bottom forming with a potential $50 target based solely on the chart (if it can break the $40 mark). It is currently yielding 7.2%. I was initially very excited in finding such a pattern in the making (as I have seen this type of pattern fulfill itself many times and I have benefited from it a few times as well) but as I researched the company further, my gut feeling was telling me that I should watch this one from the sidelines.

First off, their quarterly distributions have fluctuated and dropped quite significantly recently ($1.40 in 2006 Q1, $1.00 - Q2, $0.80 - Q3, $0.95 - Q4, $0.65 - 2007 Q1 & Q2). Since I am looking for something with a steady (and hopefully, increasing distribution over time), it doesn't really fit the criteria I set for myself for my first ever income trust investment.

I also came across a recent analyst report that suggested that Fording was overvalued compared to its counterparts. Since I know nothing about any type of coal (let alone, metallurgical coal) I really have no clue if demand for this type of coal will increase going into 2008 as some 'experts' have suggested. Just another reason for me to stay away.

On the other hand, some have suggested that Fording could be taken over. This speculation has probably been one of the key drivers in the increase in share price recently.

Taking this all into consideration, I'm going to stick with my gut feeling on this one and look elsewhere for a place to park my RRSP dollars. It will be interesting to see how this one turns out.

FDG.UN closed at $35.88 on Friday.