Chart of the Day

ArcelorMittal S.A. (MT, NYSE)

Last: 22.10

ArcelorMittal S.A. is a multinational steel manufacturing corporation headquartered in Luxembourg City. It was formed in 2006 from the takeover and merger of Arcelor by Indian-owned Mittal Steel. ArcelorMittal is the world’s largest steel producer, with an annual crude steel production of 92.5 million metric tonnes as of 2018. It is ranked 120th in the 2019 Fortune Global 500 ranking of the world’s largest corporations.

We bought MT last year shortly after it began to outperform the S&P500. This is represented by the blue line moving into the green zone in the bottom pane below the chart.

Why is a steel producer rising? My guess would be that the market is expecting massive infrastructure spending from the US government.

After a strong start to the new year in January, our portfolios are pausing as rotation between sectors continues. This is similar to the pullback from the highs that MT has had in January. We are currently up 50% on our average cost of $14.67 from October/November. After pushing to the 21 level, MT gapped higher then ran to $25.

This recent pullback has behaved well as MT is quietly  closing the December gap by pulling back to 21.42, then bouncing off of that level which happens to coincide with the 50 day moving average (DMA)  (solid blue line). You can see that MT has respected the 50 DMA during the entire run up giving it increased significance.

When we are in full Bull Market Status, we’ll hold the position as long as it is in the green zone (below). Because our Buying Power Indicator is on defense, we raise our stop levels based on chart support levels.

We’d like to see MT hold the 50 which is now acting as our initial stop.

 

 

 

 

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