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3 Steel Stocks That Are Rusting Out

Technical patterns look downright ugly in some areas

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Steel Stocks to Short: AK Steel (AKS)

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AK Steel (AKS) is threatening to fall out of a three-month pennant formation that could see shares drop all the way down to the $3.50 level — which here where the next significant volume-by-price support lies. That would be worth a 44% drop from current levels.

I’ve recommended the March $6 puts — which are only trading around 27 cents — to maximize leverage on what could potentially be a dramatic drop.

I’ve also added a short position to the Edge Sample Portfolio.

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