US Steel (X) – play the short squeeze

US Steel (X) – play the short squeeze


This Trade Was Closed February 29, 2012

Closed trade out on Jan 25

Original Trade Post:

US Steel is higher today as shorts begin to cover their positions. You can tell the short covering in the attached chart, where clusters of large volume trades are taking place today (Wednesday).

Bullish factors over the last couple days:

  1. Alcoa’s earnings report forecasted stability in aluminum demand, which is bullish for commodities overall
  2. Lennar reported earnings today, reporting a 20% increase in orders, hinting at good things for the upcoming spring selling season. More homebuilding = increased demand for Steel and other commodities.
  3. Overall S&P 500 is in good technical shape now that it’s broken to a higher range above the 1285 level and holding.

Trade Details

  • The Ticker: X
  • Target Price: 2.39 per share
  • The Trade
  • Buy to Open Feb 2012 29 Calls at 1.60 or better
  • Trade Opened: Jan 11, 2012
  • Trade Closed: Feb 29, 2012

Chart courtesy Finviz. Click to open larger.

Additional Image Provided by eatlovetrade:

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