Analysts' calls on stocks can be confusing and can be very right, or very wrong. Earlier in the month Credit Suisse put a price target of $12 on AKS to which Cramer gave a rather grim, ominous response, referencing Bethlehem Steel (comment on chart). Cramer could end up being very right in the end, but the market's RESPONSE to the Credit Suisse call was to break the stock out of a five month base to the upside, to 9.96 (Purple #1 of the Bull Flag), so for the time being, Cramer's remark wasn't enough to reverse the breakout.
Yesterday, Morgan Stanley downgraded AKS from overweight to equal weight, with a price target of $14. That's a bit confusing because the word "downgrade" gets the headline, but Morgan liked it on June 9, 2011 when it was trading in the $14's (it fell to $5.51 in October, 2011), and now they're "downgrading" it to equal weight, but they have a target of $14, which was that price of the stock when they liked it last summer. Bottom line: Morgan's downgrade seems much ado about nothing.
As long as AKS holds the FOUR upside breakouts, it looks fine. If AKS should CLOSE below the big Ascending Triangle trendline (Black #1-#3), which currently is at about 9.18, that would be cause for concern, and if AKS should take out the 8.76 low of the Purple Bull Flag, that would be a bigger concern. That 8.76 low was an initial 5% drop in the stock in response to the release of earnings, but AKS rebounded smartly and rallied to a new recovery high of 10.33 two sessions later. That 8.76 low "shouldn't" get taken down, at least not before the targets in the $10's get MADE, at a minimum.
KEY SUPPORT:
9.18 - The top of the Black Ascending Triangle (Black trendline #1-#3), which has a downward slope of -0.00312, so we "move the chains" downward a tad each session.
8.76 - The release of earnings low, which also was the Bull Flag (in purple) low.
As the chart stands, it still is broken out to the upside and still is intermediate-term bullish.
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