What Drove U.S. Steel Stock Up 15% In A Week?

U.S. Steel Corp stock (NYSE: X) increased over 15% in just the last one week (five trading days). This rally was mainly driven by the overall positive sentiment with respect to the stock. Credit Suisse upgraded the stock to “outperform” from “underperform,” a two-notch upgrade with a price target of $35. The steel giant is expected to post EPS of $2.57 in Q2 2021, which represents a y-o-y growth of 196%. Additionally, revenues are projected to jump 127% compared to the year-ago quarter. The company’s EPS has been revised 17% higher in thirty days. Such positive outlook and stock price upgrade has enthused the market with respect to X stock. Now, is U.S. Steel stock set to rise further or could we expect some correction? We believe that there is a 52% chance of a drop in U.S. Steel stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on U.S. Steel Stock Chances of Rise for more details.

Five Day: X 15%, vs. S&P500 -0.7%; Outperformed market

(4% likelihood event)

• United States Steel stock rose 15% over a five-day trading period ending 5/5/2021, compared to the broader market (S&P500) decline of 0.7%
• A change of 15% or more over five trading days is a 4% likelihood event, which has occurred 110 times out of 2516 in the last ten years

Ten Day: X 13%, vs. S&P500 0.4%; Outperformed market

(13% likelihood event)

• United States Steel stock rose 13% over the last ten trading days (two weeks), compared to the broader market (S&P500) rise of 0.4%
• A change of 13% or more over ten trading days is a 13% likelihood event, which has occurred 323 times out of 2511 in the last ten years

21D: X 0.4%, vs. S&P500 4.3%; Underperformed market

(48% likelihood event)

• United States Steel stock rose 0.4% the last 21 trading days (one month), compared to the broader market (S&P500) rise of 4.3%
• A change of 0.4% or more over 21 trading days is a 48% likelihood event, which has occurred 1202 times out of 2500 in the last ten years

Out of 110 instances in the last ten years that United States Steel (X) stock saw a five-day rise of 15% or more, 57 of them resulted in X stock declining over the subsequent one-month period (21 trading days). This historical pattern reflects 57 out of 110, or about 52% chance of a drop in X stock over the coming month.

While U.S. Steel Corp stock may have moved a lot, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how the stock valuation for Compass Minerals vs Southwest Gas shows a disconnect with their relative operational growth. You can find many such discontinuous pairs here.

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