Schnitzer Steel Industries, an American steel manufacturer, or SCHN in the Nasdaq index soared yesterday when its shares were upgraded to “Buy” from “Neutral” by UBS. the company’s profit outlook was raised by the mentioned bank due to rising scrap prices and the increasing demand from China for its materials.
As you can see from its chart, it had been trading within a descending channel for quite some time up until last week. It then went flat for a couple of days before surging. As a result of yesterday’s price action, it was able to break above its 50-day moving average and the 46.00 resistance. Its next obvious resistance now would be its 200-day MA. If it is able to move past it, it could continue to rise until it encounters some selling pressure at 56.00. On the flip side, the 46.00 marker should be able to keep it from falling any further in case it weakens. The RSI’s reading, however, is suggesting a probable move higher.