Money Markets

AK Steel Holding Corporation (AKS): Scrutinizing the Chart

Latest evolution in the price of AK Steel Holding Corporation (NYSE:AKS) stock has been one of the most talked about matter among the interested investors. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.

How has the stock performed recently?

AK Steel Holding Corporation (NYSE:AKS) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of AKS has increased +19.26%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -127%. After the latest session, which saw the stock close at a price of $6.44, AKS sits below its 52-week high.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that AKS may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for AKS is 64.14%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 78.98%, tells a different story, and suggests that AKS currently trades in overbought territory.

What do the trading volumes reveal?

Analysts use volume trends to assess the level of conviction behind a stock’s price changes. When volumes suddenly increase above normal levels, it can be a sign that investors feel very strongly in one way or the other about the future direction of a stock, or may even have access to inside information. AK Steel Holding Corporation (AKS) average trading volume of 15,456,350 during the past month is 13.65% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.

What do the analysts think?

AKS is currently overvalued by 3.37% relative to the average 1-year price target of $6.23 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.30, which implies that analysts are generally neutral in their outlook for AKS over the next year.

How risky is the stock?

When analyzing a stock’s price performance, it’s essential to take risk into account. Beta, which measures a stock’s volatility relative to the overall market, can be used to gauge the level of systematic risk associated with a particular stock.

AK Steel Holding Corporation (NYSE:AKS) has a beta of 3.16, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. AKS therefore has an above average level of market risk. During the past couple of weeks, AKS average daily volatility was 61.86%, which is -2.94 percentage points higher than the average volatility over the past 100 days.

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