One stock that's already starting to break out is Steel Dynamics (STLD - Get Report), a steel producer and metals recycler in the U.S. This stock has been hammered so far in 2011, with shares off by over 30%.
If you take a look at the chart for Steel Dynamics, you'll notice that this stock formed a double top in July at $16.40 a share. After forming that double-top chart pattern, the stock then dropped huge down to a recent low of $8.78 a share. Since that low, the stock has started to rebound sharply toward its current level of around $12.50 a share. This stock now is setting up to trigger a number of key breakouts.
Market players should notice that STLD has started to break out above some past overhead head resistance at its 50-day moving average of $11.38 to $11.50 a share on gigantic volume. Volume on Thursday registered 9.2 million shares, and on Friday it hit 4.8 million (both up days), which is well above its three-month average action of 4 million shares. This now sets the stock up to challenge some more overhead resistance at around $12.50 to $13 a share.One could be a buyer of this stock off any weakness and anticipate the next breakout above $12.50 to $13 a share. You could simply use a mental stop just below the 50-day moving average of $11.38 a share in case the stock isn't ready to challenge those resistance levels. One could also just buy this stock off strength and get long once it takes out $13 a share with strong volume. I would target a run back towards the 200-day moving average of $15.69 if this stock is ready to rip higher form current levels. Steel Dynamis is one of the top-yielding metals and mining stocks.
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