First up is Korean steel manufacturer Posco (PKX). It's been a pretty unflattering year for Posco. Shares have been locked in a downtrend since February, moving from a possible test of triple-digit share prices all the way down to $75 this summer. But the rebound in metals looks to benefit this stock more than most thanks to a bullish pattern shaping up in shares.
Right now, Posco is forming an ascending triangle bottom, a setup that's formed by a horizontal resistance level to the upside (in PKX's case at $86) and uptrending support below shares. Essentially, as PKX bounces in between those two technical price levels, it's squeezing closer and closer to a breakout above that resistance level. When that happens, we've got our buy signal in PKX.It's important not to be early on this setup. $86 has acted as a sort of "ceiling" for shares the last handful of times that this stock tried to move through it, so while shares are testing a breakout now, they still could potentially bounce lower in the pattern.
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