Steel melts up

The steel stocks have been super performers since the rally started after the dot com burst. Steel the old technology, is the current hot sector. As regular reader know, I have been bullish on steel for long time. The reason is simple, just follow the earnings and momentum.

Many investors make the mistake of getting enamored by a particular hot technology and ignore the old industry. Many times established industries go trough painful restructuring and consolidation and repair their cost structure and profit margin. Once they start showing good earnings acceleration, the market discovers them again.Steel is one sector which has gone through that phase.

Expanding economies in India, China and Middle East has also helped the steel sector to consistently outperform on earnings and sales growth. Many of these stocks still have more juice in them and most of them have just started moving up after a long consolidation. So it is not late to get on to steel bandwagon. Other metal stocks are also starting to show good momentum. So inflation theme should reemerge soon.

Following earnings and price acceleration would always get you in to right sector and right stock. It will give you a distinct edge over clueless investors and traders. It also helps you look at markets/sector or stock objectively.One of the very profitable ways to trade the market is by following earning based strategies. As I keep saying the worst kept secret on the street is earnings matter. If anyone else is telling you otherwise then either he is a fool or wants to sell newsletter or is TV pundit or perma bear.

The steel stocks
AKS,Ak Steel Holding Corp
CGA,Corus Group Plc
CLF,Cleveland-Cliffs Inc
CMC,Commercial Metals Co
CRS,Carpenter Technol Corp
FRD,Friedman Industries Inc
GGB,Gerdau Sa Ads
GNA,Gerdau Ameristeel
GNI,Great Northern Iron Ore
HSC,Harsco Corp
HSVLY,Highveld Steel & Vanadi
IIIN,Insteel Industries Inc
IPS,Ipsco Inc
MEA,Metalico Inc
MG131,Steel & Iron
MM,Metal Management
MT,Mittal Steel Company N.V.
MTL,Mechel Steel Group OAO ADS
NSS,Ns Group Inc
NUE,Nucor Corp
NWPX,Northwest Pipe Co
OS,Oregon Steel Mills Inc
PCP,Precision Castparts Corp
RIO,Companhia Vale Do Rio Doce
ROCK,Gibraltar Steel Corp
RTP,Rio Tinto Plc Adr
SCHN,Schnitzer Steel Indust
SID,Companhia Siderurgica Nacional S.A.
SIM,Grupo Simec S A Adr
STLD,Steel Dynamics Inc
STTX,Steel Technologies Inc
SYNL,Synalloy Corp
TONS,Novamerican Steel Inc
TPO,Tarpon Industries
TS,Tenaris Sa
TX,Ternium SA
USAP,Universal Stain & Alloy
WOR,Worthington Industries
WPSC,Wheeling-pittsburgh Corp
ZEUS,Olympic Steel Inc


walter said...

interesting statement from Barry R:

Despite my Macro-environment Bearishness, I have been telling clients that it is still too early to short, given the technical picture. Short interest only adds to that.

Unknown said...

Just started a position in SIM yesterday. I've been watching the metals also. As far as shorting, been looking at a few but it's hard to change my mind set when I'm long 5 or 6 other stocks. Will wait for a change in trend.

Pradeep Bonde said...

If you have long srategy, you should not worry about shorts. Staying out of markets on short side and playing only long can make more money, if done skillfully.