I've mentioned X in a couple comments last night, and I'm taking X here at 36. The stock wasn't pinned at 35, and I didn't see any bad news at the Deutsche Bank Material conference in Chicago yesterday. JPM had a note out on steel today, mentioning that steel was at an inflection point.
Well isn't the market also?
The S&P hit the 200DMA, the VIX stared to pop, and cracks are visible everywhere in the market, as the average stock has gotten hit way harder than the averages.
So my leverage play on the bounce is X. Heck, you could use options and leverage the leveraged play!
Steel inventories are down to lows at 6.5mt, auto production should increase 46% in 2009 second half, and 1/4 of that is steel demand. X is known as the most conservative of the steel companies, and they just recalled workers in Granite City for flat rolled steel. They also intend to recall workers in Ontario in their Coke works. What does that tell you?
So I'm buying the inflection point.
Buying here, should be as good as selling was in the pre-market on the June 5 unemployment numbers.