Disappointing Forecast Scrapes Up Steel Stock

X hit a three-year high yesterday

Deputy Editor
Mar 18, 2022 at 10:54 AM
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United States Steel Corporation (NYSE:X) is down 5.3% at $32.73 at last glance, after the company's first-quarter forecast missed Wall Street's expectations. The steel name expects seasonal mining headwinds, as well as pressure from the high cost of raw materials.

Today's drop has X pulling back from yesterday's three-year high of $34.80, with the stock's ascending 10-day moving average still lingering below as support. Year-to-date, the equity is up 37.4%. This short-term dip could have already been in the cards, as the steel stock's 14-day relative strength index (RSI) of 79 sits on the cusp of "overbought" territory. 

Despite rising steel prices amid the boom in commodities lately, analysts aren't sold on United States Steel stock. Of the six in coverage, four carry a tepid "hold" or worse rating. Meanwhile, there is plenty of short covering potential, with short interest making up 15.5% of X's available float. 

It appears short-term options traders are bearish as well, given the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.30, which stands higher than 89% of readings in its 12-month range. 

 

 

 

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