Relatively stable raw material costs, a secular increase in tubular goods used for oil and natural gas exploration, and rising emerging market steel demand adds to the positive story.

And, as expected, institutional investors (IIs) have been incrementally adding to their X position throughout 2009, on a likely 20-30% increase in FY2010 revenue.

Technically, US Steel's shares pushed through psychological resistance at $50, then became a tad overbought in early autumn. The shares have since corrected to about $34, including a plunge below the key 50-day moving average. Normally, this would be a concern but, given that shares have tripled since March, the calculation here is that it's just some short-term IIs taking profits. Long-term, X's chart is still in an uptrend, and this pull-back is a Buy opportunity.

Further, a P/E of about 11 is more than reasonable, given the company's growth prospects. The First Call FY2009/FY2010 EPS estimates for X are are a loss of $10.71 and a profit of $1.07.

Stock Analysis: U.S. Steel is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in X now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your X position before December 2009. Sell/stop loss if you were to buy shares in this company: $16.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.