Monday, May 03, 2010

United States Steel Corporation - Relatively Weak


Above is a daily chart of United States Steel Corporation (black bars) and in red is the S&P500.  If you look carefully at the chart you will notice that United States Steel Corporation and the S&P have been moving together up until 4 weeks ago. Over the past 4 weeks the S&P has continued to rally but United States Steel Corporation has been trending lower. In other words, this stock is now diverging from the broad market.

In the lower panel is a ratio line which compares United States Steel Corporation to the S&P500. Today we saw the S&P stage a rally while United States Steel Corporation barely could hold unchanged which caused the ratio line to move lower. As you can see, this relative strength line has broken its uptrend line indicating further weakness for United States Steel Corporation in the days or weeks to come.

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