The market finally tanked today. But it continues to show some strength here.
Surprisingly, metal stocks held steady in this mini correction. Usually, materials lead declines, but if they hold steady, there could be a case to buy stocks here.
ARE we in the middle of one of the greatest rally of a life time?? That’s the question to ask ourselves. A rally could last one year, and we are now on our 5th month. The DOW is still below its 14500 level when many of the components are already earning more than its 2008 earnings.
Theres too little noise in the market. Despite all the negativities, the positive news continue to pull up this rally. It is a crazy market here.
Looking at steel, it was a mistake to sell those shares of US steel, the stock managed to break through its triangle pattern instead of forming a double top.
The reason could be the bullish flag. Steel is trading on technicals. US Steel managed to break above its triangle, and Mittal might just do the same over the next few days. What happened to the shrinking margins theory by UBS? I think that was a bad call. As the iron ore pricing is bound to decrease in the future, and steel stocks will be back in business.
Similar patterns are seen with RIO tinto, BHP, VALE, Alcoa.
It seems like the trade is still upwards for now. This year could be one of the best years.
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