Another Short Opportunity?

A pattern is starting to emerge.

First, it was Boeing, now, it’s U.S. Steel.

Price action moves higher on news.

Trump Endorses U.S. Steel-Nippon Deal, link here.

Nippon purchase of U.S. Steel gets Trump’s approval for ‘planned partnership’, link here.

The ‘pattern’ begs the question: Can these upward ‘blips’ be sustained?

Blip Before Trip?

At this point, the answer to Boeing’s ‘blip’ from this site’s perspective is no (not advice, not a recommendation).

With that said, the short on Boeing (BA-25-02), could be stopped-out at the next session. Anything can happen.

Then, what about U.S. Steel?

U.S. Steel, X, Weekly

Price action has penetrated resistance which puts X, technically, in Wyckoff ‘Up-Thrust’ position.

There are several differences between the potential short set-up for X, and the one for BA.

First, the ‘spring’ portion on X, is missing, or not readily apparent like what can be seen here.

What Is & What May Be

Secondly, in Boeing’s case, events have already happened; production problems, design problems, quality control, labor disputes, bond ratings, already present.

Short trade (BA-25-02) anticipates, when ‘the blip is gone‘, focus on all things wrong with BA, will return.

The difference with U.S. Steel, a short would be in anticipation of things not yet present, to appear, such as the merger falling apart or some other event that negates the scenario.

Taking the two factors into account, no ‘spring’ portion of the set-up and anticipating things yet to appear, we’ll stand aside on shorting X, for now (not advice, not a recommendation).

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

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