Carlos Molina :: Swing Trading :: Trading stocks to make money in the market.

Watching X charts

Over the past week, I’ve been looking at some sectors that have been beaten by the market; the dollar, the global view, whatever,… you name it. And I have decided to comeback and take a look at a name that has always been in my radar since 2008 when it was flying in the $170 level. Yeah, you got it….U.S. Steel ( X ) .

NOTE: I am not recommending you to buy the stock. I am just want to show you what I’m seeing by studying the company and the chart of the stock.

U.S. Steel (X) Metal Fabrication Market Cap. 6.6 Billion
Dividend Yield 0.4% Dividend $0.20 52-Week Price Range $16.66 – 66.45

Fundamentals:
Trailing 12-months operating EPS growth. While U.S. Steel earnings have declined to an estimated $-8.57 from $11.45 over the past 5 quarters, they have shown strong acceleration in quarterly growth rates. The stock price is up 42.5% in the last 12 months, up 21.7% in the past quarter, and DOWN 22.60 in the past month.

Because of the company highly exposure to cyclical industries such as autos and construction, we want to be careful when studying the charts.

When looking at the chart, you can see the huge run the stock have had since Nov 3, 2009, going from $33.70 all the way up to $66.45 on January 11, 2010. That’s a 97%+ gain

You can also see how in February the stock is trading in a channel between $42.32 and $48.13. It’s important to note, Fibonacci Retracement is now close to the 78% retracement, that means a price of $40.70 entry.

Now, let’s look at the 50 and 200MA. We see clearly the stock is under both of them. Not a good signal yet. However, I added a 20 day MA, and that 20MA crossed the 50MA back in November 27 (GREEN OVAL in the chart), since then the stock just kept going higher and higher.

Right now, that same level (the 20day MA) is doing the opposite, going below the 50day MA. Last time it did that, the stock took a dive of 15% from October 26, 2009 until November 27, 2009. But if you look again, you’ll see that the actual trend started a little bit earlier => November 03, 2009.

Is this chart showing us our buying signal?

Let me tell you, I am building my position already. I am trading the volatility in the stock, and also being bullish in the market.

I know there is a lot of noise….from Greece to China. Also the dollar has been hurting all commodities. But that’s going to be OLD NEWS in a couple of weeks.

So, the decision is yours.

Now, please let me know your comments, ideas, or even better ….What is in your mind about the stock and chart. I might be wrong, so please correct me if I have make a dumb interpretation of it.

Thank you for visiting my blog, Best wishes in your trading.

Carlos Molina