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), 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.
Within the materials sector is steel manufacturer United States Steel Corporation (X), 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.
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.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here.
Source URL: http://investorplace.com/2013/09/key-breakout-attempt-for-u-s-steel-corp-x/
Short URL: http://invstplc.com/1fuqktx
Copyright ©2014 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.