After bordering on insolvency, Bluescope Steel has finally seen a turn-around in its fortunes as a steel manufacturer.
Its own restructuring efforts received a welcome boost when the government revised the anti-dumping rules in its favour Dec 4 2012.
The most recent media release January 14, 2013 announced rationalization changes to the Western Port Plant to cost $17 million, an amount the company anticipates it will recoup within 12 months.
A 1 for 6 consolidation of its shares was completed on December 20, 2012
Since the reconstruction the share price has traded in a range between $3.35 and $3.77.
A Technical Analysis view of possible share-price movement in the near future
With the improvement in trading conditions it is likely that there will be further upwards re-rating of the share-price .
For this to happen the share-price must first break-out above $3.80 (a possible entry point) before testing the $4 barrier.
Should the share-price contrary to expectation fall, traders would look for the trading range support level to hold at $3.35.
A failure of support would be a signal for a stop-loss sale.
Rebound from intact support on the other hand would be an entry signal for a long position.
The Weekly Chart shows the share price fell over an 18 month period from $12
(11/02/11) to $1.47 (27/07/12). The Fibonacci retracement levels shown are not yet in contention. The next target in a further re-rating is resistance at $4.83.
This analysis of the charts of Bluescope Steel is not a recommendation to buy or sell the shares. Do not rely on the opinions expressed in making your own decisions. See full Disclaimer page in the Menu above.
- Govt to support BlueScope workers (news.com.au)
- BlueScope Will Cut Production, Jobs in Australia to Lower Costs – Bloomberg (bloomberg.com)
Categories: Chart Analyses, Technical Analysis
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