With the stock market breaking out, I have been looking at potential new short ideas, which are basically stocks that are bouncing into resistance. US Steel does not qualify, because it is above its 50MA and not in a resistance zone. However, it seems extended here.

Name: X_TA.gif Views: 109 Size: 29.3 KB

We can see below that the EV pattern looks poor: no buyers!

Name: X_EV.gif Views: 110 Size: 38.3 KB

However, when I run the Breakout Calculator (BC) with the typical short settings, the results shown below are rather negative. This Table means that during the past 300 days, shorting X 5% above its 5MA (Extended) could not produce meaningful returns.

Name: X_T.gif Views: 107 Size: 18.6 KB

The list of trades generated is shown below. We can see that there are not many positive trades for this strategy.

Name: X_List.gif Views: 90 Size: 27.9 KB

To the contrary, when we buy X on a pull-back to its 5MA, the probability table looks much better. This means that US Steel responded better to long than short trades and that as the market continues up, I believe that the stock will continue to better respond to long trades.

Name: X_TL.gif Views: 106 Size: 18.6 KB