I took a quick peek at the charts for US Steel (X) the day before its most recent earnings report. Now I want to take a more in-depth look at the United States steel maker and see if there is any upside potential to its charts. Any upside could be directly related to new POTUS mandates for steel and steel production. So let’s dig into this US Steel (X) Post-Earnings Analysis and start reviewing some charts!

US Steel (X) – 20 Year Chart

I cover the 20 year monthly candlestick chart for US Steel (X) in this update:

“2/1/2017 – US Steel (X) Earnings Watch”

In summary, US Steel (X) formed a Shooting Star candlestick pattern in January 2017. A Shooting Star candlestick pattern is a bearish reversal candlestick pattern. Now let’s analyze some shorter-term charts and see how US Steel’s share price could pullback to its main supporting trendline. This trade may need a little more flexibility than most trades.

X – Moving Averages

This last chart for the US Steel (X) post-earnings analysis is a 1 year daily candlestick chart.

Analyzing the Share Price Activity for US Steel (X) Using Moving Averages

To tie into my previous article for Walt Disney (DIS), look at US Steel’s 1st pullback to the 200 Day moving average after the development of[s2If !current_user_can(access_s2member_level1)]….

If you want to continue reading this article for US Steel (X), you must first login. I discuss a strategy to go long shares of US Steel (X) by identifying different support areas. I then calculate a couple of different upside targets for its share price.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] its Golden Cross pattern back in April 2016. It has had a nice gain with minimal risk to the downside if you had purchased shares for the Golden Cross 200 Day trade set-up. The first pullback to the 200 Day moving average can be a good time to start building a core position for the next leg up. Keep that in mind and possibly go back and look at Disney’s chart again.

Back to US Steel (X). It just took back control of its 50 Day moving average today. Watch to see if X’s share price can maintain that control over the next day or two. If so, a scale-in entry may be warranted if X is on your watchlist. But let’s look at a different point of view before making that determination.

X – Elliott Wave & Fibonacci Analysis

So is the correction over for US Steel (X) after its bullish move today by retaking the 50 Day moving average? It appears so, but there is a remote chance that it could still face additional resistance.

If X’s share price stalls and does not make a new high in the next 2-3 days after today’s rally that started, it could be signaling that US Steel’s share price is going to develop a Double Zig-Zag wave pattern. That pattern appears to be the downside risk to purchasing shares at these levels for US Steel (X).

The second leg of the Double Zig-Zag wave pattern would be symmetrical to the first leg, as I’ve illustrated here.

Using a Fibonacci Retracement Tool to Measure the Pullback Areas from a Possible Bullish Impulse Wave Pattern

The question of whether or not the downtrend is over will most likely be answered in the next couple of days. X’s share price activity needs to be monitored over that time period if you are interested in initiating a position in the stock. It’s chart should be monitored to determine if X’s share price can make a new high or not.

The MACD Histogram is indicating buying momentum that is increasing. If this increase lasts into tomorrow, there is a very good chance that the downtrend is already over and the next leg up has already begun. If you look at the first leg down that I’ve illustrated, X’s share price did develop 2 separate Zig-Zag wave patterns that when combined form a Double Zig-Zag wave pattern. Maybe the Double Zig-Zag wave pattern I am anticipating has already developed.

Because of this uncertainty, it is important to use a scale-in strategy that allows yourself a chance to purchase shares at a lower price to average down in case the share price drops to the next support area below. However, only you can determine your risk profile.

X – More Fibonacci Analysis

This is a 2 year weekly candlestick chart with 3 different Fibonacci Extension Tools overlaid on the chart to calculate upside potential. This would be the upside potential for a breakout that has either started or may start later, regardless of the potential looming Double Zig-Zag wave pattern.

Using Fibonacci Extension Tools to Calculate Upside Price Targets for US Steel’s Share Price

Out of the 3 different Fibonacci Extension Tools, the green one seems to have the most relevance for the current uptrend. X’s share price ran into a lot of resistance at its 100% Target Line. Therefore, if X’s share price breaks through and closes above the 100% Target Line on above average buying volume, that would be the signal that the green 161.8% Target Line is in play. The 161.8% Target Line, or the Golden Ratio for the uptrend, is the $50.49 mark.

When I look at the above weekly chart, it appears like a breakout is imminent. The uptrend from the $20 to the $39 area appears to be the pole, then the correction from $39 to $30 is a flag. That makes a nice Bull Flag chart pattern.

The breakout target from a Bull Flag chart pattern is the height of the first pole. The first pole is approximately $23 in height (from $16 to $39). If you add $23 to the possible bottom of $30, that calculates to an upside price target of $53.

US Steel (X) – Summary

If US Steel (X) is a company that you are wanting in your portfolio, the blueprint to start building a position in the stock is laid out above. Sometimes you have to be aggressive to enter into a position, only to be held back because the correction that “could” take place did. That seems to be the case with US Steel (X).

Regardless, whenever its share price does breakout, it is looking most likely at a $50-$54 price target. Not a bad price target from current prices. It is even more attractive if you can purchase shares on a pullback. However if X’s share price is truly breaking out, you will most likely be purchasing shares around the $39 area after its share price confirms the move higher.

If you have any questions, fire away below or in the Idea Chamber. Good luck trading!