X trade ideas
See The Target: $X Still Has More UpsideUnited States Steel Corporation (NYSE:X) jumped on Monday and is setting up for a great day on Tuesday. After announcing a $0.05 dividend, the stock is in a perfect spot to continue its run higher. In addition, Donald Trump will be giving a speech Tuesday night where he will likely talk up buying American produced steal. When looking at the stock chart, all signals point to continued upside through $40 to a high between $45 and $47. This was the high from 2014 and will be significant resistance. Only at this point should investors consider selling the stock.
United States Steel Corporation likely to trader higher
X EARNINGS SHORT STRANGLE/IRON FLYX announces earnings tomorrow (Tuesday) after market close, and with its implied volatility rank and implied volatility metrics, it's ripe for a volatility contraction play. Here are two possible setups, which naturally might need to be tweaked this way or that depending on price movement intraday tomorrow.
Feb 17th 29/38 Short Strangle
Metrics
Probability of Profit: 68%
Max Profit: $130/contract
Buying Power Effect/Max Loss: Broker Dependent/Undefined
Break Evens: 27.70/39.30
Notes: (1) Here, as is my habit, I'm selling the 20 delta call and put. (2) I went out a little bit farther in time to the monthly, since things are generally more liquid there, so I would be more likely to get a fill at the mid without too much diddling around. (3) Look to manage at 50% max profit or about $65/contract.
Feb 17th 25.5/33/33/41 Iron Fly
Metrics:
Probability of Profit: 50%
Max Profit: $392/contract
Max Loss/Buying Power Effect: $408/contract
Break Evens: 29.08/36.92
Notes: (1) The first thing I did was check to see what a three-wide iron condor would pay with the short options at the 20 delta strikes. It was less than 1/3rd the width of the strikes, so I switched to putzing with a fly. (2) Look to manage this setup at 25% max profit (~$98/contract). (3) While the setup looks "sexier" from a max profit standpoint, you'll also notice that the profit zone is narrower than that of the short strangle. Nevertheless, is defined risk going in, so I know what my max loss is if the thing blows up in my face.
US Steel up for resistanceUS Steel is in a nice uptrend since setting the bottom in early 2016. The current uptrend is likely to remain. Recently a long term declining resistance line has been broken (the red dotted line) which had been tested late 2016. After a short pullback the stock price continues its uptrend. Both the MACD and RSI show signals for further advancing of the stock price, both curling up after setting a higher bottom. First potential resistance is the last major top, set in September 2014, around 46. This level is also the 61.8% retracement level formed from the major top around 70 to the bottom in 2016.
I have no position in X, and would be hasitant to enter a long position below 46. After breaking the resistance at 46 (significantly) I would consider a long position.
