Steel index will lead the crash in the stock markets worldwide – time to short steel stocks involved in recent mergers and acquisitions
Rina Sen
Mar. 18, 2007

The steel industry and the stocks are showing signs of major market crash. The Steel stocks have advanced a record 590 percent in the past four years. The analytics watching the merger and acquisition data as well the commodity moving averages manifest signs of very substantial bubble.

The steel prices are ready to crash and take with it the steel stocks. Steel stocks have gained 55 percent since June 2006. The supply is far above the demand right now. As the global economies enter a period of rapid slow down, Steel stocks can collapse by 70% in a relatively short period of time.

The best shorting opportunity is in those Steel stocks that are debt heavy because of recent mergers and acquisitions. Mittal Steel Co.'s $38.3 billion purchase of Arcelor SA last year was a record for the industry. Tata Steel Ltd. of India agreed to buy the U.K.'s Corus Group Plc for $12 billion in January. Both the companies can go belly up because severe debt loads if steel prices collapse more than 50% in the next five years.

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Steel index will lead the crash in the stock markets worldwide – time to short steel stocks involved in recent mergers and acquisitions
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The best shorting opportunity is in those Steel stocks that are debt heavy because of recent mergers and acquisitions.
READ MORE>>

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