Despite temporary corrections, the record
run for many raw materials does not seem to be coming to an end. The
prices for copper, iron ore - a preliminary product in the production
of steel - or steel itself are on the bull run since 2016. That puts a
strain on the industrial sector, especially the automotive industry.
However, profits are sparkling for the manufacturers of the
material.
The sector is benefiting from the fact that global demand is booming
due to the fiscal programs and natural growth. The steelmakers can
hardly keep up with production, and inventories are low after years of
steady depletion.
After a huge rally what began at the blue-# 1 // March 2020 coronavirus crash low (17.61$), steel stocks as represented by the SLX ETF (tracks a market-cap-weighted index of global steel firms) peaked this summer into so far bull market highs which have arrived within bull market week red-No. 61 at 68.22$, but have been in consolidation mode ever since.
As you can see on the technical weekly chart below, the Steel ETF (SLX) has been narrowing of late and may soon break higher or lower.
Bulls are hoping the red-dotted line (that was resistance on DECADE base from January 2013 to April 2021) now holds as main support. And all this may soon be coming to a head.
However, the bull market count clearly suggests that the Steel ETF could explode upwards very soon. And that with a probability of well over 70%, according to the GUNNER24 Forecasting Method!
Because we recognize a price-time signal on the weekly time frame here at the lows of the bull market week # 90, where the price factor = potential future DECADE Support rail united with the 90 - 1 = 89, very high and therefore also very important Fibonacci number 89.
This last week # 90 recognizable potential big price-time event perhaps means that the steel stocks have printed their next important higher bull market low, where the main trend could/should have changed from down to up!
The longer-term oriented weekly MACD is supporting a next higher bull market low here at low of week # 90 as it is about to emit its strongest buy signal in over 1.5 years!
The monthly time frame now also points to a possible significant turnaround or an important higher bull market low since this month of December is the 8th month of the correction. This is not only because the possible future DECADE support has now been hit and perhaps will hold finally, but also because the DECADE Rail coincides exactly with a natural GUNNER24 Horizontal that can be derived directly from the final low of the last bear market:
Watch closely, that the last yearslong bear market has ended at # 1 // Final Bear Market Low of January 2016, followed by a classic monthly 8-Fib number initial up impulse what automatically results in the course of the 2nd double arc uptarget what radiated about 2.5 years main resistance after it was reached for the very first time towards the end of 2017 to the beginning of 2018.
The example above shows an ideal-typical case of how long a GUNNER24 Double Arc can resist, how powerful its force can be, how many countless negative tests it can trigger..., until it is finally overcome at some point, so that new bull forces are triggered.
The DECADE Rail coincides exactly with the natural GUNNER24 Horizontal that springs from the highest price of the lower line of 2nd double arc..., and of course is additionally in full sync to the late-2017 to early-2018 bull market highs which additionally found yearly main resistance at upper line of 2nd double arc and 2*1 Gann Angle.
==> Together, the 2*1 Gann Angle, the upper line of 2nd and the DECADE Rail forced the SLX shares into their 2020 coronavirus lows, where a second longer bull market upleg began.
The SLX bull market reached its maximum extension at the May 2021 top, what is the 63rd month of the general bull market cycle.
The current December 2021 candle means the 70th month of the bull market and the 8th of the relative mild looking correction which started at the final high of 2021. And now the price is testing back the possible future main support on combined yearly and DECADE base and additionally fires that the next higher bull market low should be found at past week bear extreme what has set at 51.43$.
So actually this potential combined yearly and DECADE support rail means the ideal springboard for the beginning of another monthly upward cycle, which should then reach and finally work off the prior activated monthly uptarget of the lower line of 4th at 66$ surroundings in a few months. Please be aware of the danger that a sustainable Double Top could form there.
==> Midtterm uptarget for SLX shares seems to be the final work off of the lower line of 4th double arc at 66.00$ future main resistance upmagnet.
If your are ready to long SLX shares this month at the nearby 53.50$ with very tight stop-loss limit below the current 51.43$ correction low, this will result in one of the best risk-reward ratios of the last some weeks!!
Be prepared!
Eduard Altmann