AKS - Sector: Basic Materials --- Industry: Iron & Steel

[stocky]

How can you be sure about that - steel and mining stocks are bullish at least in short term?

Also quotting:

"Al Goldman, A.G. Edwards chief equity strategist, also expects the bull run to carry over into next week and credits the rally to rising investor confidence in the economy

"There has been a renewed interest in heavy cyclical stocks such as steels, chemicals and paper stocks," he said

[rocket8]

Hi Stocky,

You quoted AKS low PEG value but did you notice AKS PE is over its competitors?  This worried me a bit.  I did buy AKS and am hoping we breakthru the $7.60 mark.  David commented on many stocks this weekend but not AKS.  I guess his current opinion stands.

Thanks,

Rocket8
 

[stocky]

Aks has industry avg PE

http://finance.yahoo.com/q/co?s=AKS

so dont worry. In most cases its forward PE or PEG more important then PE [usually trailing PE is mentioned].

The reason to buy AKS here is technical, though better fundamentals does not hurt either

[stocky]

Infact AKS has best forward PE [5.83] among its competitors - X[6.64] and NUE [9.5].

Just making a point. Though the group as a whole is economically sensetive. Meaning will be depressed if the economy is weak.

[rocket8]

Steel prices expected to rise during second half: CSC Chairman Lin

2005/6/16
The China Post staff

Prices of steel will rise during the third and fourth quarters, China Steel Corp. (CSC) Chairman Lin Wen-yuan said yesterday. The statement caused a rally in steel shares.
Smaller shares, including Yieh Hsing Enterprise Co., Chun Yu Works and Co. and Kao Hsing Chang Iron and Steel Corp., surged to their daily limits during trading and caused a rally in larger shares, including CSC and First Copper Technology, as well.

CSC closed at NT$31.55, up 1.77 percent from the previous trading day.

Transactions in steel shares accounted for nearly six percent of overall trade volume, a percentage point not seen for quite some time as the industry had been going through a downturn.

Prices of rebar and construction-use steel had been falling, mainly due to the so-called macro-adjustment policy carried out by mainland China since last year. Feng Hsin Iron and Steel Co., one of the biggest rebar manufacturers in Taiwan, had even postponed price-quoting for this week till after a meeting with wholesalers and distributors, a move that showed a general concern for the industry in the short term.

Meanwhile, inventories are still at a high, with analysts saying June orders would be especially disastrous for mid-stream manufacturers.

Lin, however, gave a positive assessment of the industry yesterday, saying there was still strong demand for high-end steel products and it would be unlikely that CSC would continue to lower international sales prices in Q3.

Lin further cited World Steel Dynamics statistics as suggesting prices would grow internationally in the fourth quarter by as much as 60 percent.

"We're quite optimistic about Q4," he said.

China Steel Corp. has long positioned itself as a producer of high-end steel, a strategy that has helped the company to stay profitable over the years.

The company's stellar performance last year has enabled the firm to distribute cash dividends of NT$3.9 per share, resulting in a yield rate that was among the highest for publicly traded companies.

Meanwhile, Chung Hung Steel, a subsidiary of CSC, echoed Lin's remarks, saying the company holds an optimistic attitude for the fourth quarter.

"Our optimism is based on the fact that since Q2, factories and plants across the world have been running at lowered capacity," the company said. "Steel prices would fall to a bottom by July at the latest, and a rebound in prices would be expected in Q4."

[David Randolph]

AKS had a perfectly normal pullback after a gap up. This is no momentum stock, it will probably rise slowly. I'm keeping the stock.

[rocket8]

all the steel companies are down a lot today thus far
9:50am

[rocket8]

Major steel companies all way down today

[Melf Elf]

all the steel companies are down a lot today thus far
9:50am

AKS had an upside trendline breakout last Thursday, but we closed back below it on Friday, suggesting a false breakout.  With the stock currently $7.00 Bid...$7.01 ASK, it's looking like it wants the fill the $6.85 - $6.88 gap from June 15, which might be a nice buy.  Stop: A close below the current symmetrical triangle low of $6.42.

The symmetrical triangle data points:

The highs of May 18 and June 17 (connect them)
The lows of May 16 and June 9 (connect them)

If we breakout above the pattern (above the June 17 high of 7.70), add $1.76 to the breakout to determine the upside target.

[rocket8]

AKS is ugly today.  Will it fall to $6.50?

It broke thru the floor.

[Tirebldr]

So do we think that now is possibly a great time to buy back in? Or because of China will AKS drop even further? (best guess)

[3puttssuck]

My 2 cents - be careful.  Nucor (NUE) just cut quarterly EPS, stock down 2.6% in after hours.

MarketWatch
Market Pulse: CORRECT: Nucor cuts quarterly EPS view on weak demand
Monday June 20, 6:08 pm ET
By Carolyn Pritchard

SAN FRANCISCO (MarketWatch) -- Nucor Inc. after Monday's closing bell cut its second-quarter per-share forecast to near the lower end of the $1.95 to $2.15 outlook the company issued in April, citing weakened demand, primarily for sheet steel, and significant decreases in scrap prices. It also attributed the lowered view to the accounting for inventory acquired during the purchase of the assets of Marion Steel Co. (Corrects the updated forecast.)

These steel stocks seem to run in tandem.

[Melf Elf]

My 2 cents - be careful.  Nucor (NUE) just cut quarterly EPS, stock down 2.6% in after hours.

These steel stocks seem to run in tandem.

Oregon Steel (OS) lowered Q2 guidance by about ten cents last Thursday morning.  It gapped down at the open from $18.05 to $17.40, then turned around and broke out to the upside out of an Ascending Triangle.  Go figure, huh?!   

Unfortunately, OS put in a doji star candlestick on Friday, then yesterday, it fell back well  below the
Ascending Triangle upside breakout level on what sure looks like a 3-day Bearish Evening Star pattern   

Even with the steel companies lowering guidance, their P/E ratios for next year are only about 5 or 6, so they look great, fundamentally.  But, I don't like these false upside breakouts, so I agree with you that caution is warranted here.  At some point, I think the steels are going to have a very nice rally, but they might need to build a better base here for an upside breakout.

I'm not an Elliott Wave theorist, but I'm thinking that maybe the huge drop that the steel stocks had into their May, 2005 lows was a Wave 3 (the biggest part of the move) down, and that these triangles that have formed over the past six weeks are a Wave 4 corrective rally of the larger down trend.  If so, we have a Wave 5 down coming to complete the bear trend off the early 2005 highs.  That's  conjecture on my part, but it makes sense that stocks like AKS would return to the level at which they went on a parabolic rally in 2004.

In AKS, I had a buy order in yesterday at $6.87, figuring we'd fill the $6.85-$6.88 gap from June 15, then bounce higher.  That didn't occur, so I'm going to leave it alone.  AKS closed well below Thursday's trendline breakout, so it was a false breakout, and we're in No Man's Land here.  With the risk of a Wave 5 down, the better play probably is to wait for a symmetrical triangle breakout above $7.70, if we get it, or wait for a better base to form.

[David Randolph]

Melf Elf is absolutely correct in his analysis of AKS, I thank him. There was a false breakout, I see a profit turn into a loss and a man has to take action when something like this happens, and that is:

Fear a small loss will turn into a larger loss and sell for a small, protecting capital for the next speculative venture.

[Tirebldr]

Dont Care about the drop -$ 8 next week
by: mrkt_edge_god
Long-Term Sentiment: Strong Buy    06/21/05 08:22 am
Msg: 63823 of 63830

Steel stocks are all trading above DMA 50 right
now except AKS and SCHN, well see a low @$6.50
and then it will go up to $8,9,10,17 again and 20 in six months.
Easy, just follow the trend.
And the trend is UP.

From Yahoo msg bd
http://search.messages.yahoo.com/search/messages?tag_M=aks&fname_M=txt_comment