United States Steel Explodes On Down Day

Despite a substantial drop in the overall markets, shares of United States Steel X have jumped 4.2% to $21.23 in today's action on heavy volume (16.3 million shares today vs. 9.1 million daily average). The stock has gained 9% since hitting $19.36 in the opening minutes of Monday's session. There may be a few reasons for the recent push. A rumor was published by Benzinga on Friday of last week regarding the possible acquisition of U.S. Steel by ArcelorMittal MT. Also, earlier today VTB Capital initiated coverage on US Steel with a buy rating and a price target of $28.60. As the one year daily chart below shows, shares of U.S. Steel have been consolidating in a large range between $17.63 and $23.84 since mid May. The stock recently found strong support at the $19 level and appears to be ready to making another run at $23 resistance. Should that level be broken, no resistance comes into play until $29.13. If shares fail to break $23 once again, however, look for a retest of that $19 support level and possibly a move below the 52-week low of $17.63.