3 Big Stock Charts for Wednesday: United States Steel Corporation (X), Baxter International Inc (BAX) and United Technologies Corporation (UTX)

Advertisement

Despite the toppy market, we’re continuing to see breakout stocks that are suggesting continuations in bullish trends among some earnings winners. Among these names are United States Steel Corporation (NYSE:X), Baxter International Inc (NYSE:BAX) and United Technologies Corporation (NYSE:UTX).

United States Steel Corporation (X)

United States Steel Corporation (X)
Source: Chart courtesy of StockCharts.com

It was a good day for steel stocks earnings yesterday as both U.S. Steel and peer AK Steel Holding Corporation (NYSE:AKS) announced results that were better than market expectations.

Shares of X have rallied to a new 52-week high, up more than 270% from when it was trading at $6.15 in January. The stock is seeing a breakout following results from AK Steel earlier yesterday.

Technically, the MACD for U.S. Steel is indicating that there is more room for this rally to move, as the stock is likely to break outside of its top Bollinger Band with another day of bullish buying. Steel stocks have been one of the less crowded trades over the last two years over worries of slowing economies and cheap prices from China.

The RSI for U.S. Steel indicates that the stock is slightly overbought, but this is more likely to turn into a runaway stock situation due to the quick improvement in the industry and the fact that this stock is emerging from single-digit status, which means that analysts will start closer coverage and money managers will take more interest.

This suggests that in U.S. Steel’s case, overbought is likely to just become more overbought during the next three months.

United Technologies Corporation (UTX)

United Technologies Corporation (UTX)
Source: Chart courtesy of StockCharts.com

Dow component United Technologies reported better-than-expected results for their second quarter. The beat is sending its shares higher by 3.1% to levels not seen since last July.

The industrial conglomerate beat consensus with earnings of $1.82 per share.

United Technology shares are now challenging the top of their Bollinger bands as the stock breaks into a new bullish trend after seeing a consolidation in prices that has lasted more than three months. In addition, the stock’s 50-day moving average is now moving into an ascending pattern, which is another indication that we should expect United Technology shares to continue their bullish course.

A slightly overbought condition may work itself off over the short term, potentially retesting the $106 level, but a hold of this price will indicate that the technicals for United Technology are ready to drive prices higher over the next three months.

Baxter International Inc (BAX)

Baxter International Inc (BAX)
Source: Chart courtesy of StockCharts.com

Baxter International followed suit in beating earnings expectations and raising their guidance, a move that is going to attract more bullish activity to this healthcare name. Yesterday’s close at $48.01 puts BAX stock right at the top of its upper Bollinger Band as we head into trading today, increasing the chances that we’re going to see a breakout into a new intermediate-term bullish trend.

This relative strength leader has spent some time consolidating between the $45 and $48 levels for the last two months, offering short-term traders the opportunity to benefit from going long or short in BAX stock for a few weeks at a time. However, the break above $48 and the Bollinger Band activity means that Baxter is likely to be handed over to the trend traders.

Upgrades have come in on the shares and we expect to see the crowd start to take interest in Baxter as a longer-term trender now.

From here, look for some resistance at $50, just due to round numbers, but the upside potential for Baxter is strong technically.

As of this writing, the Johnson Research Group did not hold a position in any of the aforementioned securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/07/3-big-stock-charts-tuesday-united-states-steel-corporation-x-baxter-international-inc-bax-united-technologies-corporation-utx/.

©2024 InvestorPlace Media, LLC