{"id":24845,"date":"2014-10-07T00:47:07","date_gmt":"2014-10-07T07:47:07","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=24845"},"modified":"2014-10-07T00:47:07","modified_gmt":"2014-10-07T07:47:07","slug":"bearish-drop-steel-stocks","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/10\/07\/bearish-drop-steel-stocks\/","title":{"rendered":"A Bearish Drop In Steel Stocks"},"content":{"rendered":"

It was September 17, 2014. Not even a month ago. U.S. Steel (X) enjoyed another gap up just 6 weeks since it printed a 19.4% post-earnings<\/a> gain. The headline drivers for the latest pop were: 1) a price target boost from Goldman Sachs<\/a> (GS) from $47 to $58, 2) X’s announcement of strategic business actions<\/a>, and 3) an increase in earnings guidance, albeit not quantified. Since then, it has been all downhill…and fast.<\/p>\n


\n
\"A<\/a>
A swift and abrupt change in sentiment<\/figcaption><\/figure>
\n
\n
\"In<\/a>
In the last 18 months U.S. Steel has almost traversed its entire post-recession range. Note that this is peanuts compared to the remarkable recovery during the last bull market!<\/figcaption><\/figure>
\n<\/center><\/p>\n

U.S. Steel has sold off straight down 11 of the last 12 trading days. It filled the September 17th gap up in 7 trading days. It has now even sliced right through potential support at the 50-day moving average (DMA). This kind of reversal and breakdown is very bearish for the stock. Yet, I cannot find any definitive news to explain the sudden reversal. From a technical perspective, a complete reversal of the post-earnings gains makes sense as it would neatly coincide with a retest of the still rising 200DMA.<\/p>\n

U.S. Steel is not alone. This is NOT a company-specific reversal. Several steel stocks are exhibiting similar trading patterns: a rapid rise to a September 17th peak for the year followed by an almost immediate plunge.<\/p>\n

Nucor Corporation (NUE) is retesting its 200DMA and back to negative for the year.
\n


\n
\"Nucor<\/a>
Nucor lost its hold on a six-year high and is now trading DOWN year-to-date<\/figcaption><\/figure>
\n<\/center><\/p>\n

Steel Dynamics Inc. (STLD) has broken through 50DMA support and like U.S. Steel looks ready for an eventual 200DMA retest.<\/p>\n


\n
\"Steel<\/a>
Steel Dynamics is back to the top of its 2-day post-earnings reaction from July<\/figcaption><\/figure>
\nSource for charts: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

I started this year wanting to return to tracking the steel industry more closely. I never did and last month felt like I missed out on a major opportunity. There is clearly another major opportunity, but now I am lot less sure it is to the upside in the near-term.<\/p>\n

Be careful out there!<\/p>\n

Full disclosure: no positions<\/p>\n","protected":false},"excerpt":{"rendered":"

It was September 17, 2014. Not even a month ago. U.S. Steel (X) enjoyed another gap up just 6 weeks since it printed a 19.4% post-earnings gain. The headline drivers for the latest pop were: 1) a price target boost from Goldman Sachs (GS) from $47 to $58, 2) X’s announcement of strategic business actions, … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[43,44],"tags":[244,190,1594,45,46,193,194],"class_list":["post-24845","post","type-post","status-publish","format-standard","hentry","category-industrial-sector","category-steel","tag-nucor-corporation","tag-nue","tag-steel","tag-steel-dynamics","tag-stld","tag-u-s-steel","tag-x"],"yoast_head":"\nA Bearish Drop In Steel Stocks - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/10\/07\/bearish-drop-steel-stocks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Bearish Drop In Steel Stocks - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"It was September 17, 2014. 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