Blast A Short Trade On $X At This Level

United States Steel Corporation (NYSE:X) is trading at $17.69 + 1.35 (+8.26%) on the day. The stock is one of the strongest today ahead of the Federal Reserve statement. The steel sector overall is strong with names like AK Steel Holding Corporation (NYSE:AKS) and Steel Dynamics, Inc.(NASDAQ:STLD) also higher.

 

The key to this chart is to note that at the $19.00 level there is a major downsloping trendline as well as a major gap fill. Technical analysis dictates the price of US Steel will likely trade up into that level before having a serious pull back. In other words, it is wise to not short this play until it achieves the target price of $19.00. A pull back would be in the realm of 10-20%.

 

Note the chart below…

 

Gareth Soloway

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