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Trade of the Day: United States Steel Corporation (X) Stock a Solid Investment

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United States Steel Corporation (NYSE: X ) - It may not be as big as 50 years ago, but "Big Steel" still is a major producer of a wide variety of steel plate, sheet, tubular, and tin products in North America and Europe.

Sales are forecast to be down 10% this year, but Standard & Poor's expects a rebound of 10%-plus in 2017. Earnings this year are expected to be at a loss of $2.15, but analysts expect a rebound in 2017 to $1.35. S&P increased their estimate for 2017 by 5 cents due to the Donald Trump plan to increase tariffs on imports along with an increase in demand from infrastructure support.

Significant demand for steel encouraged S&P to raise its 12-month target by $12 to $38. And yesterday Morgan Stanley's analyst commented that U.S. Steel demand could increase by 20% from the Trump Infrastructure Plan.

On the victory of the president-elect, U.S. Steel executed a 2½ point break-away gap from $21.40, followed by a minor Continuation Gap from $29 to $29.50. The stock hit a high of $39.14 five sessions ago and has since retrenched on profit-taking to a support line at $34.

Overall "X" has broken from a four-month saucer with convincing strength. But profit-taking may drive it back to the support line at $34-$35, and that is where I suggest buying it. Technically, this formerly out-of-favor, old-line manufacturer could produce a trade to $42 for a proposed gain of 20%. U.S. Steel is also a good long-term investment since the rehabilitation of North America's infrastructure will take years to accomplish and U.S. Steel could be a long-term beneficiary.

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The Nasdaq and Tech Stocks Quietly Lead

The Nasdaq was almost unheralded as it broke to a new closing high at 5,531.82. The junior index has jumped almost 30% from its February low, and yet on Monday most investors were focused on the Dow and its attempt to overcome the 20,000 line.

The post Trade of the Day: United States Steel Corporation (X) Stock a Solid Investment appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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