United States Steel Corporation (NYSE: X)

United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular).

Take a look at the 1-year chart of Steel (NYSE: X) below with my added notations:

1-year chart of Steel (NYSE: X)

During the past several months, X has formed a level of resistance to watch at the $38 (red) mark. The stock has tested that mark multiple times since the second half of April. A close above that $38 level would most likely lead to higher prices for X.

The Tale of the Tape: X has a key level of resistance at $38. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $38.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT