New York, November 19th (TradersHuddle.com) - Shares of AK Steel Holding Corporation (NYSE:AKS) closed the session at $3.57 well below calculated support at $5.01. Price action placed the stock in oversold territory as investors and money managers moved out of their positions.
AK Steel Holding Corporation (NYSE:AKS), through its subsidiaries, produces flat-rolled carbon, stainless, and electrical steels, and tubular products primarily in the United States and internationally. The Company produces coated, cold rolled, and hot rolled carbon steel for the automotive, appliance, construction, and manufacturing markets. AK Steel also cold rolls and aluminum coats stainless steel for customers in the automotive industry.
AK Steel's stock was trading in a well defined range with support at $5.01 and resistance at $5.77, prior to its decline. When the stock broke calculated support, it sparked the current down draft, which has shown how traders move out their positions in the stock.
From a technical perspective, the AK Steel stock is in severe pain, as the harsh sell-off could place a heavy burden on buyers, who as they look to get their money back, might generate a price dynamic where buyers will become sellers as the bounce materializes. It can be expected that previous support will become resistance, as a new range gets defined. The maximum move for the stock should be calculated to return to previous support at $5.01. Traders wanting to play an oversold bounce in AK Steel, by establishing a long position, would need to wait for evidence of buying at a specified area.