Steel stocks continue to perform much better than most, continuing higher after their recent 6 week pullback. As US Steel exemplifies, the whole industry group is moving in unison.
SPY is currently in an uptrend, exhibiting back and fill action. Our position remains bullish, until and if the trend line from February is broken with conviction. Higher volume would be needed. A caution flag is in affect, as prices are below the 9/20ema on this time frame.
RSI might continue higher, along with stochastic and MACD if the SPDR sectors resume their upward trajectory. Remember the block zone below at 213.50 as one possibility today. That would mean we might overshoot the ascending trend line in question. If this happens look for buyers and a wick to form. If the bearish outcome prevails, we’ll know how to position our trades. This would require a close below this same trend line.
The weekly chart gives us reason to pause as well. Price is sitting on the short term moving average. Stochastic is leading higher, which gives us reason to believe we’ll continue to see back and fill action with an upward bias.
In either case, either outcome would dictate our thoughts going into the next few days. A close below the aforementioned conditions would have us lean bearish short term. We will remain bullish if we close above.
We bought AKS and PLNT yesterday.
Happy Trading – CV