Steel stocks are represented by the SLX ETF. Almost one third of the holdings of SLX (28% to be very precise) are two steel stocks: Rio Tinto (symbol RIO) and Vale (symbol VALE), so clearly this fund is very top-heavy with just two companies representing a massive portion of the market.
Steel stocks higher – how high can they rise?
The daily chart of the steel stocks sector, represented by SLX, looks spectacular. SLX went up more than 250% in the last 13 months. Note how trading volume has risen as well, though it seems that volume has peaked in the November – December timeframe.
How much gas does this rally have left in the tank? We’ll have to wait and see, but another 25% or so doesn’t seem out of the question.
The Market Vectors Steel ETF (NYSE:SLX) was unchanged in premarket trading Tuesday. Year-to-date, SLX has gained 18.74%, versus a 4.13% rise in the benchmark S&P 500 index during the same period.
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