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December 18 Chart of the Day - US Steel

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US Steel (X) apparently has agreed to be acquired by Japan's Nippon Steel for $14.9B cash which comes out to $55 per share.

In what turned out to be a bidding war Nippon outlasted Cleveland-Cliffs $35-per-share cash-and-stock bid for U.S. Steel.

A couple of question immediately come to mind regarding this transaction.

First, since the company will now be owned by a Japanese firm will they change the name from US Steel to something else?  

Second, from a price action technical analysis perspective did Nippon know there was a long term trend line and other potential structure that could act as resistance to price and simply picked that number?

We doubt that was the case. It was probably a room full of financial and legal experts churning out spreadsheets to come up with the number but isn't it ironic that the price came in on the chart where it did?

The higher time frame monthly charts below are from Friday's $39.33 close and again from today's $50 open...

Again we ask the question is it Technical Analysis or News that drives price action?

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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