Going Where the Action Is

Last week we discussed the possibility for a rotation within the materials/mining complex, away from the very extended and short-term crowded precious miners and down to the global/base metals and materials miners, including steels. 

It appears that rotation is becoming increasingly pronounced today, with steel names picking up steam to the upside while precious miners pull in more as I write this. 

With this in mind, a "catch-up" play in the steels would be the South Korea steel giant, POSCO.

On the monthly chart, below, if PKX can regain its breached 2008 crash lows it likely indicates a recent false breakdown. And considering the overall strength in steels in 2016, it could easily yield an aggressive move higher--Breaking and holding back over $47 should do the trick. 

These types of rotations are similar to what we saw with the like of copper miner FCX this week. So even if the precious miners come in some more this week and beyond, the underlying bid in the XME sector at-large would bode well into the rest of 2016 for the entire complex.