Arcelor Mittal: double bottom, bearish divergence and no consensus in sight

Arcelor Mittal: the double bottom nobody dares call confirmed

There is a stock that has been making everyone nervous for months. Arcelor Mittal drew a double bottom on weekly charts, confirmed it and completed it, and since then it has been trapped between 9 and 10 euros, with the occasional flirtation with 13. The most repeated technical analysis thesis is that the steelmaker may be leaving its accumulation phase and entering an uptrend. The reality, for now, is different: every attempt to break through resistance crashes.

The 10.75 resistance has become a wall. The price gapped up on the back of the news, but made no pogre. The resulting candle was, in technical terms, a clear distribution candle. And the MACD shows a bearish divergence powerful enough to stall any advance. Only prices above that resistance would invalidate the signal and change the bias, which is currently bearish.

Why doesn't Arcelor Mittal rise even though it's cheap?

The fundamental argument circulating in the market is uncomfortable: global steel overcapacity, emerging countries with their own steel industries —Russia and China at the forefront— and warehouses full everywhere. Excessive dumping, the argument goes, is dead. In that scenario, a cheap share is not automatically an opportunity: it can stay cheap for years.

"We're in an IBEX uptrend and a lot of people trying to put money into the stock market look at what's cheap and Arcelor comes up", sums up one of the most critical positions. Idle money looks for a destination, and the low-priced stock appears on every shortlist. The problem is that being cheap is not a strategy.

The double bottom, the triple bottom and the ugly candle

The technical sequence has been bumpy. First, the double bottom that had been forming since mid-last year and was confirmed towards the end of it. Then, the double bottom target achieved. Next, a fresh failure at the 10.75 resistance that left a weekly candle described bluntly as ugly. And the warning that, if things kept going like this, the next scenario would be a triple bottom.

The Koncorde adds another layer: the smart money appears to be exiting and the highs suggest the current trend is running out of steam, at least in the short term. With that cocktail, some closed their positions and others are staying out until the price breaks the resistance and invalidates the candle.

From pessimism to "it will surprise us soon"

The conversation has shifted. From warnings of caution it moved to "it will surprise us soon", with long-term entries on the assumption that the pullback didn't matter. The price tested 13 euros, closed six cents above on heavy volume and touched 13.4 again before turning around. Those who sold at 10.38 or 10.50, barely covering commissions, later watched the stock recover those levels.

The most honest closing remark comes from someone who admits to being baffled: stay out until it breaks the resistance. And the puzzling data point: while Arcelor still won't get going, other steelmakers such as Acerinox have been performing like rockets for months. If the sector moves with the recovery, the question is why this one is being left behind.