Key Breakout Attempt for U.S. Steel Corp. (X)

by Serge Berger | September 10, 2013 10:43 am

U.S. equities frolicked higher yesterday, September 9, on the back of a big rally in Asia and eased concerns around a possible military strike on Syria.  Most sectors of the benchmark S&P 500 index acted exceedingly well, among them the materials group, which, with yesterday’s 1.50% rally, managed to close at a fresh year-to-date high, and a level not seen since June 2008.

On the below chart of the Materials Sector SPDR ETF (XLB[1]), note that it had been trading in a range since July, but after bouncing off its 50-day simple moving average (yellow line) on August 29, it managed to build up enough force to finally push past the $41.60 area.

xlb Key Breakout Attempt for U.S. Steel Corp. (X)[2]

Within the materials sector is steel manufacturer United States Steel Corporation (X[3]), which hasn’t been able to get out of its own way in recent years, but since May of this year managed to form a series of higher lows.  With yesterday’s 3.50% rally, the stock pushed to a higher high, and now is only 2.00% away from its 200-day simple moving average and less than 8.00% from a major multi-year down-trend line (black).  Those two resistance points, however, serve as good reference areas for traders looking to play the stock on the long side.

X 18 month chart Key Breakout Attempt for U.S. Steel Corp. (X)[4]

On the year-to-date chart of United States Steel Corporation, note that yesterday the stock bumped up against a line of resistance that dates back to May, and a push above there would be clearly bullish.  From a tactical point of view, if and when the stock manages to push toward the 200 day moving average (red line), after some potential near-term consolidation, the stock could begin to accelerate a move higher and toward the $22 – $23 area.

X year to date Key Breakout Attempt for U.S. Steel Corp. (X)[5]

Serge Berger is the head trader and investment strategist for The Steady Trader[6]. Sign up for his free Weekly Market Outlook Video here[7].

  1. XLB:
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  3. X:
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