Steel Dynamics, Inc. (NASDAQ: STLD)

Steel Dynamics, Inc., together with its subsidiaries, produces and sells steel products in the United States and internationally. The company operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. The Steel Operations segment provides a range of sheet steel products, including hot rolled, cold rolled, and coated steel products; structural steel beams, pilings, and rails; special bar quality and merchant bar quality rounds and round-cornered squares. The Metals Recycling and Ferrous Resources Operations segment purchases, processes, and resells ferrous products, such as heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast iron products; and processes nonferrous products consisting of aluminum, brass, copper, stainless steel, and other nonferrous metals for use in foundry, mill refining, and smelting applications. The Steel Fabrication Operations segment produces steel building components comprising steel joists, trusses, girders, and decking products for the non-residential construction industry.

To review Gannett’s stock, please take a look at the 1-year chart of STLD (Steel Dynamics, Inc) below with my added notations:

1-year chart of STLD (Steel Dynamics, Inc)

STLD has been trading sideways since the beginning of the year while forming a common pattern known as a rectangle. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. STLD’s rectangle pattern has formed a $16 resistance (red) and a $14 support (blue). A break above $16 would also be a new 52-week high.

The Tale of the Tape: STLD is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $14, or on a breakout above $16. The ideal short opportunity would be on a break below $14.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT