United States Steel has been on fire lately. The stock climbed up from $44 to $65. I had been burnt by it when I shorted United States Steel at $48, but I quickly covered it at $50. And then I went long early this week at $59, but today, the strong selling pressure, and the sudden drop of the EURO made me sell this company at $64. I also went on to short this stock as the selling pressure was really strong. Furthermore, the entire market was beginning to drop. Investors are using Trichet as an excuse to sell their shares. Some continue to fear that the DOW has risen too much.
Possible double top? I think United Steel will be sold off by investors who bought last month, and buyers will buy at the support of 20SMA line which is currently at $60 or if there is further selling pressure, the 50SMA line would provide more buying pressure at $55, that is the white line. An unlikely scenario is a drop to the 200SMA line which is at $45. This is if traders want to fulfill the double top pattern.
I am short at $64 and I have stop loss at $63.5.
If the market continues to dip tomorrow, there may be a short opportunity for new shorters at $63.15
My first target is $60, and second target is $55.
Finally, I am profiting from a short trade of United States Steel which was the first stock that I recommended shorting.
I am also shorting CLIFF Natural Resources $CLF.
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