Steel stocks have been in the crosshairs over the past couple of trading sessions, after President Trump announced tariffs on steel and aluminum imports.
Thursday, stock prices of American steel producers surged higher, rallying on hopes that the tariffs could drive more business to U.S. firms. The administration plans on imposing a 25% tariff on steel imports and a 10% tariff on aluminum imports as early as next week.
But almost as quickly as they rallied, steel stocks have come back on earth Friday as market participants worry that the prospect of a trade war and political pushback could put the kibosh on the plan.
Don't let that recent volatility scare you off of steel. Despite the price swings in steel stocks, a pair of the biggest names in the industry are actually looking bullish in March. To figure out how to trade them, we're turning to the charts for a technical look.
U.S. Steel Corp.
Leading things off is U.S. Steel Corp. (X) , one of the biggest American steel producers. U.S. Steel has been in a long-term uptrend for the past year, one that actually accelerated back in mid-November. While the firm corrected alongside the rest of the market in early February, it's already since made new highs, leading the rest of the broad market during that time frame.
In the context of U.S. Steel's recent price action, the last couple of days don't look especially dramatic -- shares have been consolidating just below the $46 level since breaking out above January's highs, and that $46 line in the sand is the level that shares need to push materially above to trigger a new buy signal in U.S. Steel.
It's a good idea to keep a close eye on U.S. Steel here.
Steel Dynamics Inc.
The other bullish setup in the steel industry right now is $11.4 billion steel producer Steel Dynamics Inc. (STLD) . You don't need to be an expert trader to figure out what's happening in shares of this big steel stock. Instead, the price action is about as simple as it gets.
Steel Dynamics has been bouncing its way higher in a very well-defined uptrending channel since back at the end of September, catching a bid on every test of the bottom of that price range. And in March, that uptrend is alive and well. The buy signal for Steel Dynamics comes on this stock's next test of trendline support down at the bottom of its price channel. Put simply, it's a "buy the dips stock," even as volatility makes investors in other steel companies nervous.