ArcelorMittal (MTS) shares are expected to continue falling in the second half of the yearPaul Roberts 25 / July / 22 Visitors: 722
The metallurgical giant is suffering on the stock market after the fall in metal prices. ArcelorMittal (MTS) shares have lost more than 30% in a month after consolidating for almost a year with resistance of about 30 euros.
Metal prices are under pressure amid growing fears of a recession on both sides of the Atlantic. The economic downturn that began last spring is finally starting to affect the mood of market participants and is expected to continue in the coming months. Indeed, the economic outlook is expected to continue to deteriorate in the coming months, based on several leading indicators, such as the ratio of new orders to inventories in the manufacturing ISM, which has fallen to its lowest level since the beginning of the first containment or even reversal of the rate curve.
Thus, ArcelorMittal shares are likely to increase their losses in the coming months, unless the economies of Europe and the United States eventually prove more resilient than expected to monetary tightening and prevent a recession.
- Weekly chart of ArcelorMittal (MTS) stock quotes - key levels
- ArcelorMittal (MTS) Sales price Forecast source: PRT charts
- ArcelorMittal shares may fall to 17 euros in the coming weeks
As for technical analysis, ArcelorMittal (MTS) shares issued a serious bearish signal at the end of June, coming out of the lower range in which it had been moving since last summer, at about 23 to 30 euros.
The exit from the lower part of this range is consistent with the economic downturn and is likely to continue in the coming months. Theoretically, the exit from the lower part of the range opens the way to a decline to the March 2021 minimum of about 17 euros.
Stocks could fall below this threshold and reach an October 2020 low of about 11 euros if the economic downturn is bigger than expected, the Western economy falls into recession, and it will be harder for China to restart than expected.
These bearish prospects would theoretically be cancelled out in the event of a range recovery, but that seems unlikely (unless we see a very rapid economic recovery.
Paul Roberts 51 years old Born in Edinburgh. Married. Studied at University of Oxford, Department of Public Policy and Social Work. Graduated in 1997. Works at Standard Life Aberdeen plc.