Stocks were mixed in early trading this morning. The Nasdaq rose as the 10-year Treasury yield retreated. The Dow was slightly down and the S&P traded flat. Will Wall Street bounce back from last week’s negative trend, who knows?
In the current split market rally, investors should be cautious about adding new stocks, especially techs, to their portfolios. Instead consider commodities-based stocks which are gaining momentum, thanks to an economic recovery that’s pushing up demand and prices.
Our trade alert for today highlights one such stock and some analysts say is near its buy point.
United States Steel Corporation (X) is an integrated steel producer with major production operations in the United States and Central Europe. United States Steel manufactures a wide range of value-added steel sheet and tubular products for the automotive, appliance, container, industrial machinery, construction, and oil and gas industries. An integrated steel producer uses iron ore and coke as primary raw materials for steel production. United States Steel is also engaged in other business activities consisting primarily of railroad services and real estate operations.
At the start of the pandemic last year, steel mills were shut down to stop the spread of the virus among workers. Also, end-users in various industries closed too, slashing demand for steel.
Now steel prices have soared as demand outpaces supply while steel producers race to get back online. Trump-era tariffs, which President Biden is keeping for now, and hopes for an infrastructure bill also are keeping steel prices high.
U.S. Steel stock climbed from a low of around 5 in March 2020 to a high of 24.71 in January. Analysts at Investor Business are calling a cup and handle here “Shares are closing in on a buy point of 24.81 from a cup base, though they fell 7.3% to 22.41 last week. On a weekly chart, X stock now has a cup-with-handle buy point with a 24.56 buy point. The daily chart is on track to have a proper handle with that 24.56 buy point after close Monday.”
The stock also carries a Zacks #2 raing of Buy. The 9 analysts offering 12-month price forecasts for U.S. Steel Corp. have a median price target of $23.89.
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