Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates in three segments: Steel Mills, Steel Products, and Raw Materials.
Take a look at the 1-year chart of Nucor (NYSE: NUE) below with the added notations:
After peaking at $56 back in July, NUE rallied to new highs, and has now fallen back down to that same $56 level (blue). That mark has also provided support on two prior occasions. Now that the stock is coming back down to that level again, traders may be able to expect some sort of a bounce.
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The Tale of the Tape: NUE has a key level at $56. Traders could enter a long position on a test of $56, with a stop placed below that level. Traders that are bearish on the stock could enter a short position on a break below that level instead.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach