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Dennis Gartman: Don’t Overlook Plunge in This Metal

If you’re trading industrials and natural resource stocks, strategic investor Dennis Gartman tells us you better have an eye on what’s happening in this metal.

Iron ore has plunged 18% in 6 months,” says Gartman. “And it’s telling me that it’s time to look at steel companies because iron ore is the major component needed to make steel. In other words, a major input cost has become awfully cheap.”

Although Gartman's thesis should bode well for all steel makers he's particularly bullish on US Steel – not only because of this positive fundamental development but also because of the technical action.

“The stock refuses to make new lows and that I find interesting,” he says. “Not only hasn’t it made new lows but it’s starting to move higher.”

That according to Gartman is a buy sign.

Posted by CNBC's Lee Brodie

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Trader disclosure: On August 22, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long SBUX; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long EMC; Joe Terranova is long NXPI; Steve Weiss is short: AAPL PUTS; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU

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