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The steel industry may not seem very exciting to investors, but steel stocks are poised for a major rally. United States Steel (X) is perhaps the best-known name, and that stock is indeed attractive right now, but the decision support engine has identified a company with an even higher probability ranking for big gains: ArcelorMittal (MT) .

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Above is the monthly bar chart of ArcelorMittal over the past 15 years. It shows that the entire decline off the 2008 peak can at last be deemed complete. The most important thing to note is that the stochastics are now mimicking the extreme oversold condition of 2001. That was the last time this company -- and the steel industry as a whole -- was as hated as it has become in the past year. In fact, one can make the case that ArcelorMittal is even more oversold now than it was back then. That's because stochastics made a higher low later in the cycle during 2000 and 2001. Stochastics found a lower low later in the recent cycle that began in late 2014, even though prices in 2016 bottomed at a higher price than the 2001 extreme low. This is known as a bullish divergence buy signal, and it's one of the conditions that the decision support engine's algorithms search for.

If the final low is in place, or even if the stock makes one more low under $3, the objective conditions in ArcelorMittal (and United States Steel, for that matter) are so profound that they present a great buying opportunity. The decision support engine's probability-ranking algorithms show that risk can be limited to $3.25, while the stock has the potential to stretch toward $20 in the coming nine to 18 months. At ArcelorMittal's current price near $4.25, that's $1 of risk for $16 dollars of reward! 

Now, few stocks travel straight up (or down) without corrective moves. But, as the daily bar chart below shows, at least the first correction off the first impulsive rise is either complete or will be complete soon. Therefore, the green box in the chart highlights the ideal buying zone, and the green dashed lines represent how members of our live-market Trading Room typically "ladder" into a long position, buying both above and below current price levels.

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This process is one of the ways we seek to minimize the emotion and ego attachment to trying to pick the lowest price to buy and highest price to sell. Instead, we place limits and buy stops and let the market drag us into the position, rather than attempt to impose our desires on the market, which usually leads to disappointment and losses.

The decision support engine is flashing an alert that buying actions only are indicated right now. So, if you own shares of ArcelorMittal, you should hold them and consider adding to your position. If you have no exposure to this stock, you should use the green dashed lines to purchase the stock. And if you have sold short this stock, use those same lines to buy the stock and cover your position. 

Interested in this kind of market analysis? Sign up today for a FREE 7-day trial of our Decision Support Engine Premium Service at no obligation. Inquire about special pricing for readers after your complimentary trial.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.