It has been a move for the history books.  Stocks like United States Steel (NYSE: X), Alcoa Inc (NYSE: AA), Titanium Metals Corp (NYSE: TIE) and Century Aluminum Company (NasdaqGS: CENX) soaring into the end of 2009 like a rocket ship headed for the stars.  Just in the last month or two, these metal stocks have ripped higher by 25 – 50%.  It now looks like they are coming into massive resistance levels and I am issuing a red alert sell signal.

Based on valuations, growth projections and technical extensions above key levels, these stocks have been added to my red alert drop list.  I expect them to see 10% or more corrections in the near term of January.  Already today, United States Steel has started to form a daily bearish candle along with Alcoa Inc.  U.S Steel has rocketed higher since the hit of the 200ma on November 3rd, 2009 at $34.00 to a high today of $58.19.  It is far above the 20ma and after a four day surge, multiple indicators are showing a January or sooner correction coming.  Look for price to fall back to the 20ma.

The same can be applied to all the other stocks listed.  The extension moves they have had were due partly to short squeezes and partly to momentum runners as hedge fund and money managers looked to show these in their portfolios for year end statements.  Come January or sooner, I am issuing a red alert sell signal on all these stocks.  Be smart, learn the technicals, understand the fundamentals and go the opposite of the crowd.  Learn, Live, Profit!

Gareth Soloway
Chief Market Strategist