Right now, the fundamentalists are in a strong tug-o-war between the bullish and bearish stance for the steel and iron sector.

Frankly, I don’t know how China’s dwindling demand or Obama’s infrastructure plan will ultimately affect the sector in the long term, but I know that right here, right now the steel and iron industry is a strong sector with a lot of bullish potential during the summer.

How can I be so sure?

Because the charts never lie.

I make my profits with technical analysis, which relies heavily on stock charts. When I analyze thousands of charts each day, I’m looking for geometric patterns — that is objects or shapes that the stock’s price performance is making.

Because patterns repeat, we can use them to determine the probability of a certain outcome — in our case, the probability of how far a stock with move and for how long.

Technical Analysis Takes the Guesswork Out of Investing

Technical analysis helps traders distinguish between what is real and what we think is real. With emotions running as high as the mercury this summer, finding reliable information can mean the difference between cursing big losses or celebrating explosive wins.

Given my long-standing successes with trading, I’ve found that technical analysis points the way to the most profits because the only real thing is where a price is at the end of the day — not a pundit’s opinion and certainly not speculation.

When you think about it, price is nothing more than investor emotions plotted on a grid in the form of lines or shapes that show how they feel about that particular index, stock, ETF, currency or commodity — and that can tell traders a lot.

Build Profits with These Three Iron & Steel Stocks

Knowing what I do, I can tell you that, given the chart patterns I’m seeing, I fully expect the following three iron and steel stocks to make big moves up before the summer’s out.

All three stocks have similar chart patterns right now characterized by run-ups to strong resistance levels, and then pullbacks off of the highs, which makes now an excellent time to get long at a discount.

And there’s no better way to make the most of a stock’s move than by trading its options.

NEXT: Steel Stock #1

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Steel Stock #1: United States Steel (X)

First on my list is steel titan United States Steel (X).

Now, X does have to overcome resistance near the $42 level, but I fully expect it can do that sooner than later.

Think of resistance levels as brick walls. Every time a stock hits the resistance, it takes another chunk out of the wall, so that it’s left weakened. All X needs is one good hit to punch its way through.

To net some cool profits during the summer heat wave, the best trades in X are the $40 strike calls, whether you choose to play that more conservatively with the September calls or take on more risk with the August options.

My short-term target for X is $50.

Steel Stock #2: Nucor Corp. (NUE)

Nucor Corp. (NUE) appears to be in an ascending triangle pattern, which is a short-term bullish pattern that takes approximately three months to play out.

By the time summer is wrapping up, I believe bullish calls in Nucor will have thrown off some heat to options traders!

An ascending triangle is a basic chart pattern that’s easy to recognize. It’s characterized by a flat top and a rising bottom trendline.

However, NUE’s ascending triangle has more of a corrective nature. It recently almost hit its bottom trendline, which means a bounce back typically follows. It has to hurdle its resistance just below the $50 mark, but I believe it will do that and climb right up to the $55 level.

The best way to take advantage of this impending move is to buy the NUE August or September $55 strike calls. They both appear to be really great plays, especially at these levels.

Iron Stock #1: Cliffs Natural Resources (CLF)

Cliffs Natural Resources (CLF), formerly known as Cleveland Cliffs for the company’s headquarters, is in a very similar pattern to NUE. Bottom line: CLF is ready for a breakout.

But, again, it’s not a classic ascending triangle because CLF’s historical pricing involved more of a consolidation after previously hitting resistance around the $31 level.

After CLF makes it past that, I’m looking for the stock to take a small pause between $32 and $33 and then zoom up close to the $40 level.

The best way to conservatively play this potential move is in the CLF August and September $30 strike calls.

There’s no need to get bogged down with the big, long-term picture of any sector when you can focus on near-term bullish profits — and when you bank your wins, you can thank technical analysis, which has netted my Parabolic Options subscribers 170% in nine days, 124% in five days, 60% in one day and more. Learn more here.