ARCELORMIT­TAL SA – BREAK­OUT

Finweek English Edition - - COMPANIES & MARKETS -

Trend: Short term up. Medium term turn­ing up. Long term tech­ni­cally down.

Strat­egy: Buy for more fol­low through. Af­ter mov­ing side­ways for many months and form­ing a base, ArcelorMit­tal broke out above two re­sis­tance lines last week (lines 1 and 2). That was sig­nif­i­cant, as it also con­firmed a (bullish) in­verse head and shoul­ders (as la­belled). The daily sto­chas­tic os­cil­la­tor (on top) is rel­a­tively over­bought. But any pull­back is likely to be tem­po­rary un­til the up­side tar­get is met. Buy at cur­rent lev­els (it was trad­ing at 8475c at the time of writ­ing). If the stock pulls back to­wards line 2 (8200c) then buy more. The min­i­mum up­side tar­get (short term) is 8850c – ie, the height of the in­verse head and shoul­ders pro­jected up. That will also be a retest of its Au­gust highs. Take most trad­ing prof­its there. But medium term this stock has the po­ten­tial to reach R100: so pull­backs will con­tinue to be buyable. The ini­tial stop-loss is a close be­low 8125c.

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