"Buy American Steel Only" Rule Strengthened in US stimulus bill
With China's massive supply glut (China has more inventory on hand than all of Korea's and Japan's production for one year) and now America turning its back on foreign steelmakers, where's the growth for POSCO? Supply gluts and protectionism are trends that will not disappear anytime soon but will linger for several years. In addition, Bernanke will start raising interest rates soon, which is causing the Korean won to drop like a rock (it hit 1,180 won/$ today from 1,150 just a week ago) and foreign investors are starting to flee the Korean stock market en masse. SELL NOW!! PKX below $110 by 12/31. The "Buy American Steel" movement will help create US steel jobs and reduce US unemployment, so Obama will sign it.
By the way, the recent run-up to $129 was caused by Bloomberg TV's weird breaking news-style reiteration of the month-old news that POSCO selected some place in Alabama as a site for a new $17 mil. factory, its belated very first factory ever in America. This month-old news was already reported, but for some reason the other day Bloomberg treated it like it was some sort of breaking news that deserved repeated mention every hour. Now that everyone knows that it is months-old news, expect POSCO to fall back to where it was before the repeated mention. Also, at its current rate of appreciation (up 25% in one month), POSCO would hit 700,000 won in a month, but as everyone knows there will be an endpoint and what goes up must come down. Be fearful when others are greedy--SELL!