U.S. Steel

Another ascending triangle pattern is shaping up in shares of U.S. Steel ( X). Typically, ascending triangles are thought of as bullish continuation patterns -- they come into play after an up move has already occurred, like the setup in Merck. But in the case of U.S. Steel, shares are actually making an ascending triangle bottom.

So is that a cause for concern? Nope.

As a trader, it's important not to get hamstrung by the "textbook" definition of a setup; instead, the crucial element of the X trade is the glut of supply of shares at $32.50 and the indication of buying pressure from uptrending support. Those two technical levels are ultimately what cause the price action we're looking for in shares.

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U.S. Steel does give us some extra hints, though. A big one is momentum, measured in this case by 14-day RSI. Momentum is a leading indicator of price -- so the short-term uptrend in RSI confirms the bullish bent in X.

Even so, wait for that $32.50 breakout before becoming a buyer.

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