ArcelorMittal (ADR) (NYSE:MT) Breaks Out Above $14.75
Posted On 19 Aug 2013By : Karen KinseyComment: 0Tag: ArcelorMittal (ADR) (NYSE:MT), NYSE:MT
Denver, CO, 08/19/2013 (Avauncer.com) – ArcelorMittal (ADR) (NYSE:MT) (Closed: $13.95, Up: 0.36%) opened gap up and showed strength in the early part of the session but was affected by a selloff at the middle of the session to close flat. The volume at 8.5 million was a bit higher against the average volume of 6 million. The candle formed a red one signalling only a pause in the uptrend.
One of the fastest growing stocks, this became also one of the most beaten up stocks in the bear market of 2008 and it really never came out of it yet. Some signs are there on the horizon for a possible reversal but much more confirmation is still required. One of the initial signs could be found from the indicators, especially RSI. The 14-day RSI usually moves in a band of 30 – 70 in a bear market and 40-80 in the bull market. This difference in behaviour comes in very handy when we try to get a sense of any possible transformation. In this case, the RSI has not moved above 70 for the last 3 years or more. But the interesting thing is that the last short term correction could not push it below 40 and instead got a sharp bounce to 70 levels, for the first time in the last 3 years. Now if it can move above 75 or touch 80, that would be a definite signal to the phase changing from bear to bull.
The second sign comes from the price itself, which is much more important. The price action from the February 2012 top of $23.62 has created an Ending Diagonal or a Falling Wedge which shows exhaustion on the part of the bears. The breakout point of the pattern comes to $14.75. A successful breakout of this would give us a target of $23.62 in the coming days and with a Cup & Handle pattern breakout already at place above $13.49, it looks very much possible. The Cup & Handle pattern on the daily charts gives us targets of $14.42 and $15.88.