This stock was blowing up on Stock Twits and Twitter this week. I’m speaking of United States Steel, which has overall been a pretty boring stock actually, at least it was. Most of my students were simply doing put sales or covered calls long term. Directionally, this was a hard one to really pinpoint until today.

Gap Is Key

I love this gap on X. It really ensured that any person, company or fund who sold X short is going to have to buy to close as of 7/30/14.  The black arrows show where the stock had some strong selling pressure from the shorts, especially the third black arrow. You can see how much volume came in during that time frame. The stock had lower highs and had a strong resistance around $30.25. With the strong gap above the $30.25 resistance and the strong volume on 7/30/2014, my projections for this stock…well… they are bullish, or at least definitely not bearish.

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Small Pattern

Also, you may notice a tiny inverted head and shoulders pattern between May and the middle of June. It’s small but certainly there, adding to the impetus of this potentially nice bullish move. Something also worthwhile to take note of is the 200-period simple moving average on a weekly chart at $29.44. The candle and volume is well above that price. Now, X could come back and retest that level (and likely will), but that strong resistance, now support, gives some solid risk: reward ratios for a nice target of $40 and then $60.

Bottom Line

Create your personal plan and follow it, ladies and gentleman! Thanks for all of your support and for being so incredible!
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