Steel Dynamics ( 
STLD ) is consolidating on the daily chart but forming an inverted head and shoulders (IHS) pattern, signaling potential bullish reversal. Neutral until breakout above 140 pivot, but bias leans bullish with supportive steel fundamentals. Long idea on confirmation; current price ~132-135 (as of July 23, 2025). Upside targets offer strong risk-reward if triggered.
Thought Process Walkthrough:
Spotting the Setup: Scanned steel stocks amid sector rebound signals. STLD's daily chart shows a downtrend bottoming at 107, forming IHS: head at 107 support, shoulders higher, neckline ~140. Overlaid rectangular consolidation (107-151.5) adds confluence for breakout potential.
Technical Tools: Used trendlines (descending from highs, capping at 140-151.5), pivot points (140 key reaction level), and classic patterns. No indicators needed—price action clear: volume up on rallies, RSI neutral ~50. IHS target: measure 33-point head-to-neck, add to breakout → ~173 (adjusted to 185 for prior highs). Rectangular height ~44 points → 208 target.
Key Levels:
Support: 107 (IHS head, historical low—break invalidates bull case).
Resistance: 151.5 (rectangular top, past peaks—break above 155 confirms momentum).
These are significant due to repeated price reactions, providing high-probability zones.
Prediction: Consolidation now, but bullish breakout likely if 140 clears on volume, driven by pattern resolution and fundamentals. Without it, range-bound neutrality persists.
Fundamentals Supporting Thesis:
US steel outlook for 2025 shows moderate growth: CAGR ~2.4% through 2030, driven by automotive and construction demand. Economic moderation but robust drivers like infrastructure spending position the sector. ForSTLD STLD, Q2 2025 EPS $2.01 missed estimates but operating income rose 39% despite challenges; revenue $4.57B, EBITDA $533M. Management eyes profitability acceleration into 2026 via efficiencies and demand While global capacity rises ~6.7%,US protections and STLD's strong balance sheet support upside.
STLD ) is consolidating on the daily chart but forming an inverted head and shoulders (IHS) pattern, signaling potential bullish reversal. Neutral until breakout above 140 pivot, but bias leans bullish with supportive steel fundamentals. Long idea on confirmation; current price ~132-135 (as of July 23, 2025). Upside targets offer strong risk-reward if triggered.Thought Process Walkthrough:
Spotting the Setup: Scanned steel stocks amid sector rebound signals. STLD's daily chart shows a downtrend bottoming at 107, forming IHS: head at 107 support, shoulders higher, neckline ~140. Overlaid rectangular consolidation (107-151.5) adds confluence for breakout potential.
Technical Tools: Used trendlines (descending from highs, capping at 140-151.5), pivot points (140 key reaction level), and classic patterns. No indicators needed—price action clear: volume up on rallies, RSI neutral ~50. IHS target: measure 33-point head-to-neck, add to breakout → ~173 (adjusted to 185 for prior highs). Rectangular height ~44 points → 208 target.
Key Levels:
Support: 107 (IHS head, historical low—break invalidates bull case).
Resistance: 151.5 (rectangular top, past peaks—break above 155 confirms momentum).
These are significant due to repeated price reactions, providing high-probability zones.
Prediction: Consolidation now, but bullish breakout likely if 140 clears on volume, driven by pattern resolution and fundamentals. Without it, range-bound neutrality persists.
Fundamentals Supporting Thesis:
US steel outlook for 2025 shows moderate growth: CAGR ~2.4% through 2030, driven by automotive and construction demand. Economic moderation but robust drivers like infrastructure spending position the sector. For
STLD STLD, Q2 2025 EPS $2.01 missed estimates but operating income rose 39% despite challenges; revenue $4.57B, EBITDA $533M. Management eyes profitability acceleration into 2026 via efficiencies and demand While global capacity rises ~6.7%,US protections and STLD's strong balance sheet support upside.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.