STLD chart is currently neutral; support test suggests accumulation potential but requires a breakout above the 50-day moving average to confirm upside.

Steel Dynamics, its symbol is STLD. This company came onto our radar last week as we were approaching a clear support level. This level falls within the range of approximately 217 to 220 . That was the lowest level we recorded here in May. You can see that we retested it in July and August, and then we tested this same level of support about a week ago. The 200-day moving average also looms large at approximately the 216 level on this particular chart. This stock is actually stuck in a zone of confusion between moving averages. So, I like the fact that it bounces off the support level. This tells me that this is an area that could be a very good opportunity to accumulate, and to trade towards a new high. But what we would like to see on this chart is a breakout above the 50-day moving average. In this situation, where we are above a rising 200-day moving average but below the 50-day moving average, I call it moving average confusion, where we are between these two extremes. What we are looking for is a proper breakout above the 50-day level to confirm the success of the support test and confirm a new breakout. So, frankly, I consider this graph to be neutral at this stage. I like that he tested the level of support. This gives me confidence that we have a clearly defined level of downside risk, because I would not be comfortable keeping it below the 200-day level. So, this gives me a clear pain threshold for the lower side, and I also have an idea of what penetration might look like . A breakout above the 50-day level could be very convincing.