U.S. Steel Corp stock (NYSE: X) tanked more than 20% in just the last one week (five trading days). In the last one month, the stock has lost about 6.6%, but the 20% drop in value has been very sharp. The primary reason for this drop has been news from China. With an aim to combat the rising price of finished goods at its factories (and shrinking profit margins for its producers), China’s National Food and Strategic Reserves Administration announced that it will release metal in batches in the near future. Copper and aluminum held in government strategic stockpiles were specifically named as targets of the action, and also zinc, which is used for galvanizing steel. China’s announcement saw base metal prices dropping, which is bad for companies like U.S. Steel, as it means more competition on price from China.
In comparison to X’s 20% drop, the broader S&P 500 decreased only 2% over the last one week. When we look at the change over the last one month, X stock has dropped 6.6% as against a rise of 1% in the S&P 500. Now, is X stock set to drop further or could we expect some recovery? We believe that there is a 55% chance of a decline in X 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 X Stock Chance of Decline for more details.
Twenty-One Day: X -6.6%, vs. S&P500 1.1%; Underperformed market
(32% likelihood event; 45% probability of rise over next 21 days)
United States Steel stock declined 6.6% the last twenty-one trading days (one month), compared to broader market (S&P500) rise of 1.1%
A change of -6.6% or more over twenty-one trading days is a 32% likelihood event, which has occurred 794 times out of 2515 in the last 10 years
Of these 794 instances, the stock has seen a positive movement over the next twenty-one trading days on 357 occasions
This points to a 45% probability for the stock rising over the next twenty-one trading days
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Ten Day: X -14%, vs. S&P500 -1.7%; Underperformed market
(10% likelihood event; 42% probability of rise over next 10 days)
United States Steel stock declined 14% over the last ten trading days (two weeks), compared to broader market (S&P500) decline of 1.7%
A change of -14% or more over ten trading days is a 10% likelihood event, which has occurred 255 times out of 2517 in the last 10 years
Of these 255 instances, the stock has seen a positive movement over the next ten trading days on 106 occasions
This points to a 42% probability for the stock rising over the next ten trading days
Five Day: X -21%, vs. S&P500 -2.1%; Underperformed market
United States Steel stock declined 21% over a five-day trading period ending 6/18/2021, compared to broader market (S&P500) decline of 2.1%
A change of -21% or more over five trading days (one week) is an extremely rare event, which has occurred 15 times out of 2517 in the last ten years
Out of 794 instances in the last ten years that United States Steel stock saw a 21-day decline of 6.6% or more, 437 of them resulted in X stock declining over the subsequent one-month period (21 trading days). This historical pattern reflects 437 out of 794, or about 55% chance of drop in X stock over the next month
While X 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.