The shares of United States Steel Corporation (NYSE:X) are edging back down towards their three-year lows at the $10 level, off 1.2% at $12.12 at last check, after the stock's 100-day moving average thwarted its latest attempt at a rally. This puts X at a 32.9% year-to-date deficit, just ahead of its third-quarter earnings report, which is scheduled for after the close on Thursday, Oct. 31. This isn't the first time the 100-day acted as a ceiling for the stock, and according to one study, it's historically meant more downside for X.
The study in question, conducted by Schaeffer's Senior Quantitative Analyst Rocky White, show that X has run into this trendline five other times in the past three years. After each of these run-ins, the steel producer was lower one month later, averaging a nearly 14.6% decline. From where it currently sits, a move of similar magnitude would put X near the $10.45 level.
Traders might want to also look at the steel stock's last eight post-earnings moves. The security has swung wildly in both directions during that time, finishing higher just half the time. During these last two years, the equity has averaged an 8.1% next-day swing, regardless of direction. This time around, the options pits are pricing in an even bigger move, though, at 11.2%.
Unsurprisingly, an uptick in bearish bets has been seen among options traders recently. X sports a 10-day put/call volume ratio of 0.87 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 74% of all other readings from the past year. Short sellers have echoed this bearishness, with short interest up 17.3% in the last two reporting periods. What's more, these players have a solid 33.2% grip on the stock's available float -- nearly four days at X's average pace of trading.
There's been no love for X among the brokerage bunch, either. Only one analyst considers United States Steel Corporation a "strong buy," while the other 11 in coverage consider it a "hold" or worse. What's more, the consensus 12-month target price of $10.64 is at an 11.8% discount to current levels.