Uncertainty of Trade Tariffs Dampen USS Steel Company "X"
1. USS Steel was performing very well until it reached resistance/52 week high of $47.64... From here we have seen a big drop in price... plenty of which came from the negative Trump Tariff news, and the additional 100 billion president trump plans on tacking on to those tarifss.
2. Since X top at $47.64 it has pulled all the way back to the low $33's here is has found support, and by looking at the chart you can see this was a previous support level.
3. What is unique about the the current support level is it maps out what we call and almost picture perfect head and shoulders pattern.
4. Right now we are with out a doubt in a head and shoulders pattern on "X", Head and shoulders patterns are a Bearish pattern, but before they turn full grizzly bear, they usually see a little mini bull run up to resistance. Resistance in this case is what we call the left shoulder of the Head and Shoulders pattern.
5. If trade war politics settles for a bit, and we see some green days in the market place we should see "X" have a little recovery within a few days to a week!
Conclusion : United States Steel is currently in a bearish head and shoulders pattern. X still has to perform the right shoulder of the pattern.... since the right shoulder has not yet happened there is still room to get in for a swing trade/long position. Surprisingly the pattern has not yet taken off because the fear of trade wars still lingers in the news. If there was not such a negative catalyst in the news that directly affects steel company's we would have most likely already missed the chance to get in long on "X".... This also concerns me that the long biased trade has not fully taken off. One way to combat these uncertain times is to scale back in share size, and add small shares at time as trend stays valid.
Peter, you are correct, on the flip side you must be ableto anticipate moves in the market to have the extra edge, your right if X heads up and rejects off the left shoulder than we do have a head and shoulders pattern, on the flip side if you cant see the possible pattern before it happens then you cant be long up until the left shoulder as well,
Peter_Wendt
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Good post! However, it's important to remember that a head and shoulders pattern isn't confirmed until the neckline is broken. With a solid earnings report tomorrow, the price could very well jump to around $41 without subsequently falling to complete the H&S.
UnknownUnicorn2779697
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@Peter_Wendt, secondly say you want to get short on this pattern, the best entry short is at the rejection of the left shoulder, where as most will get short at the break of the neck line. you should be getting short off the rejection of the left shoulder, and selling through the break down of the neck line