J.P. Morgan Securities upgraded AK Steel stock to "overweight"
A little more than a month after delivering a disappointing third-quarter miss, AK Steel Holding Corporation (NYSE:AKS) received some favorable news earlier this week, with the U.S. Commerce Department issuing a preliminary ruling that steel products from Vietnam that are made with Chinese substrate will face import duties. Upbeat analysts are chiming in, with the steel stock scoring a key upgrade this morning.
Specifically, J.P. Morgan Securities upgraded AK Steel to "overweight" from "neutral," while also raising its price target to $7 from $6. Analysts believe the Vietnam court decision should "support higher steel prices." As such, AKS stock is up 5% out of the gate to trade at $5.27.
It's been a tough year for AKS, with the shares down nearly 51% year-to-date heading into today's trading, and falling to an annual low of $4 on Nov. 15. However, the rally today has AK Steel shares breaking out above their 50-day moving average for the first time since an Oct. 31 earnings-induced bear gap.
Part of these longer-term technical troubles are likely the result of intense selling pressure from short. Although short interest is down from its Sept. 15 peak of 73.25 million shares, these bearish bets are still up almost 20% year-to-date.