WHAT DOES US STEEL CROSSING BELOW ITS 100 DAY MOVING AVERAGE TELL US OVER THE NEXT FEW WEEKS?
Published March 25, 2017
On March 24, 2017 the United States Steel (X), crossed below its 100 day moving average. Historically this has occurred 152 times. When this happens, the stock does not always continue to drop. It has a median drop of 5.249% and maximum drop of 31.518% over the next 10 trading days. This last occurred twice in October 2016 and the stock dropped 12% over the following 6 trading.
When we take a look at other technical indicators, the relative strength index (RSI) is at 37.0645. RSI tends to determine overbought and oversold levels. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the stock is looking for direction and has been heading downward since February 21.
The true strength index (TSI) is currently -0.6478. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current reading declares the stock is trending downward.
The negative vortex indicator (VI) is currently 1.1048. The VI determines current trend and direction. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the stock is trending downward, with the most recent highly negative reading being 1.3075 on August 25, 2016.
Considering the moving average crossover, RSI, TSI, and VI levels, the overall near-term stock direction appears to be trending downward. Based on historical movement compared to current levels, the stock could drop another 4% before turning upward again. A recently held support area exists at 31.33
DISCLOSURE: I currently do not have positions in the stock mentioned above. I most likely will not enter a position within the next 72 hours. Historical movements and technical indicators should never be the sole basis for entering positions involving risk. Make sure appropriate research is conducted prior to taking any risk in a marketplace.