clevernamegoeshere
Long

X long based off, surprisingly enough, fib extensions

NYSE:X   UNITED STATES STL CORP NEW
39 2 2
I'm day trading full time now and, being much busier, have fallen out of the habit of posting my swing ideas on here. By way of apology, here's my analysis of my favorite trade I've made in the last few months.

US steel has had a good run over the last four months, moving an average of 7 points a month since June of this year after 3.5 years of accumulation. I picked up X long in my swing portfolio when it broke 33. I sold out of it at the 40 psychological resistance level, quite happy with my seven points. As it turns out, maybe I shoulda held onto it for a little longer.

The question on all the funny mentalists minds is: when will this rally end? Coincidentally enough, I've been wondering the same. I mean, look at that month chart. Ain't it about time we put in a red bar? Maybe.

Now for the reason for the fibs. As i was doing my price action levels, I noticed a trend as I went from month to week to day, looking at the 2011 timeframe: my levels looked a helluva lot like fib levels. So I traded out my median around 41 for the fib base and ran the upper bound to 64, the peak from February 2011 and area of major distro in 2010. Lo and behold, all the levels were almost 1:1 with mine. Freaking neat.

Where from here? Think of the momentum this name has. We've put 20-some points on the board in four months. We're coming off of almost four years' worth of accumulation. So I'm thinking to 52 before we see a retracement, and I don't think that's gonna be a big one...maybe three points and then sideways for a while. I plan on buying a handful of nov14 50 call contracts and one or two 40 puts to hedge. The market is choppy as hell right now and I strongly recommend strangling any long you decide to take.
Well, there goes that 3 point pullback. All of these stocks that the bulls have been gobbling up the last few months took a hit last week during the SPY's slide...It's sitting right on top of the 41.25-ish support line and where it goes from here is entirely up to the market and earnings next week. There's a fair chance that this distribution is occurring ahead of earnings because of an expected beat--I've seen it happen all too often when the market makers drive a stock's price down through steady distro just before earnings to pick it up cheap. Or who knows? Maybe X will post a loss and this is the MM's cashing out before it hits.

Again: hedge your bets through the end of the year, folks. Strangle all of the things. Let the market make up its mind about where it's going. We're waaaay overdue for a 10% correction and a retest of the lower level of the SPY's ascending channel.
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clevernamegoeshere clevernamegoeshere
2 years ago
* next month, not next week.
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