Earlier this year I continued to note how $X U.S. Steel was setting up for a potential sharp move to the upside. I stated that, upon breaking long term trendline resistance, the stock could be the trade of 2014.
Here are three of my $X charts posted before the stock started its recent rally.
Sure enough $X broke resistance and today continued an impressive 2014 rally. I see a similar chart for $SHLD heading into this weeks earnings report. The stock remains on the cusp of breaking a long term trendline that when broken, will send the stock 30-50% higher in a short period of time.
In anticipation of such a move I have bought Call contracts that will profit should the stock breakout. If SHLD moves sideways, declines, or makes just a muted upside move my call contracts will swiftly drop in value.
Here is the X and SHLD chart. You can see how $X broke swiftly to the upside once long term resistance fell.
As crazy as it sounds right now, I think $SHLD could see $50 easily, short term, on that trendline break.
I am in the weekly SHLD $38 calls at $.50 and I am looking for October calls before Thursdays earnings report to capitalize on the potential move higher.