Trading Idea: Momentum Building in AK Steel
Published on Monday, 22 July 2013 09:40 Written by TradersHuddle Wire
New York, July 22nd (TradersHuddle.com) - Shares of AK Steel Holding Corporation (NYSE:AKS) closed the trading session at $3.35 with its price action in a very tight range, given that calculated support is set at $3.26 and the calculated resistance is set at $3.43.
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 price action indicates that both sellers and buyers are materializing very close to each other. This signals an area where momentum is building, since the stock can resolve by breaking out of the developing tight range.
Traders wanting to establish a position should pay close attention to AK Steel's price action, as any movement outside its predefined range of $3.26 and $3.43 could grasp the attention of momentum buyers that look for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support could spark above the average selling. A tiered approach could be the best way to start a position; enter into it while the stock is in the tight range, and then add to this position as it breaks and closes above resistance.
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