ArcelorMittal Shares Drop Nearly 2% Breaking Below Its 50-Day Moving Average Amid Pressure
In early afternoon trading, the Luxembourg-based steelmaker continues its consolidation in a downward trending CAC 40. The stock is among the largest declines of the Paris index, occurring amidst a backdrop of increased volatility, with a notable rise in the VIX.
The Stock Falls Below its 50-Day Moving Average and Tests its Support Zone
ArcelorMittal's stock falls by 1.95% to €53.22, marking one of the steepest declines in the CAC 40. The stock has dipped below its 50-day moving average (MA50) of €54.93, showing a negative gap of 3.11%, after already losing nearly 5% over the week and 8.6% over the month. The consolidation persists, though the stock still maintains a gain of over 100% year-on-year and remains 20% above its 200-day moving average (MA200) of €44.28, highlighting the magnitude of the rally since last summer.
The price is now approaching the support level identified at €51.26, a key level to watch for the continuation of the downward movement, while the RSI at 42 indicates seller fatigue in recent sessions without signaling oversold conditions. Today's drop occurs in a tense market environment, with the VIX jumping 7.68% to 20.06, signaling a resurgence of risk aversion in European markets.
A Consolidation Amid a Loaded Macro and Sectoral Context
The session is marked by an unfavorable macroeconomic environment for cyclical assets. In the United States, the BEA released household income and expenditure statistics yesterday: the May PCE index rose by 4.1% year-on-year and the core PCE by 3.4%, levels that keep pressure on the Federal Reserve. Moreover, the U.S. GDP for the first quarter was revised upwards to an annualized 2.1%.
These releases support the hypothesis of a longer restrictive monetary policy, unfavorable to sectors sensitive to the industrial cycle such as steelmaking. Concurrently, several key issues remain to be monitored for the group, including the strategic agreement with AWS announced on June 22 and the joint call made on June 17 with ThyssenKrupp and Voestalpine for a reform of the European carbon market. The next technical key level is the support at €51.26, whose holding will determine the continuation of the consolidation phase.
