Shares of AK Steel Holding Corp (NYSE:AKS) finished Wednesday's trading session higher by more than 10%, despite the lack of any major news.
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Broad Market Rally
One reason why AKS moved higher Wednesday was the rally in the broad market indices. AKS has a high beta of 2.56, so the stock likely benefited from the nearly 1% move higher in the Dow and S&P 500.
AKS Leads Steel Sector Higher
As shown by the chart below, AKS was the leader on Wednesday by a significant margin. While Nucor (NYSE:NUE), Steel Dynamics (NASDAQ:STLD), United States Steel (NYSE:X), and the steel ETF Market Vectors Steel Index Fund (NYSEARCA:SLX) all moved higher, AKS was the standout. It should be noted that the second biggest winner was United States Steel. This is noteworthy because AKS and X have a much higher short interest than the rest of the steel sector. This likely means that a good part of Wednesday's move in X and AKS was driven by short covering.
- AKS: 29%
- X: 26%
- STLD: 2.7%
- NUE: 4.3%
My opinion on AKS remains unchanged from my previous commentary, I would avoid the name. There are better ways to invest in steel, my favorite way is through Nucor as I believe it is the highest quality steel company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.