BUZZ-Steel ETF: Bend can lead to break on the charts

** Earlier in the week, VanEck Vectors Steel ETF pushed to a fresh 5-year high

** However, amid resumption of market weakness, news of President Donald Trump's plan to impose tariffs on steel and aluminum imports, SLX threatens double top on the charts

** ETF peaked at $51.40 on Jan 12, suffered ~14 pct decline into its Feb 9 trough ($44.42). Chart: http://reut.rs/2F8CUEG

** With (Other OTC: WWTH - news) recovery, hit $51.91 Mon, highest level since May 2012

** However, daily RSI failed to confirm, warned ETF ripe for downside turn; subsequent reversal has SLX 3.4 pct lower WTD

** And given momentum study still has room to fall before reaching oversold, ETF at risk for $44.42 test, or about 10 pct below last price

** Breaking this support can confirm double top; pattern proj would call for sub-$38.00

** ETF needs to overwhelm $51.40/$51.91 resistance to resume advance

** Of note, SLX composed of both U.S. and foreign-based steel stocks. About 62 pct of weight end-Jan foreign vs 38 pct U.S. (Thomson Reuters (Dusseldorf: TOC.DU - news) data)

** From Jul 2016 to Sept 2017, amid an SLX advance, ratio of price performance of its U.S.-based members vs foreign-based members trended down

** Ratio then essentially moved laterally; with tariff news, reaching 9-month high

** That said, ratio will need to break above near 2-year resistance line to add greater confidence in sustained outperformance by the U.S. constituents

** Meanwhile, investors skeptical of Trump tariff plan