Buy the Dip on This Steel Stock

NUE could benefit from an unwinding of pessimism

Deputy Editor
Dec 2, 2021 at 2:30 PM
facebook twitter linkedin

The shares of Nucor Corporation (NYSE:NUE) are cooling since running into the $120 level in late November, with pressure forming at the formerly supportive 30-day moving average. While NUE looks ready to snap its nine-week win streak, the silver lining is this pullback has the steel stock trading near a historically bullish trendline, indicating a rebound could be right around the corner.

Digging deeper, Nucor stock just came within one standard deviation of its 160-day moving average, after spending a considerable amount of time above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred in the past three years. The security enjoyed a positive return one month later in 67% of those instances, averaging an 8.6% gain. From its current perch, a move of similar magnitude would put NUE at $117.90.  

NUE Chart Dec 2

An unwinding of pessimism from the brokerage bunch could send the shares higher, as five of the seven in coverage still recommend a tepid "hold" rating. Meanwhile, the 12-month consensus price target of $116.09 is a 6.9% premium to NUE's current level of trading.

Further, a shift in the options pits could put more wind at the security's back. This is per Nucor stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 71% of readings in its annual range. Echoing this is the stock's Schaeffer's put/call open interest ratio (SOIR) which sits in the 91st percentile of its 12- month range. This means short-term traders have rarely been more put-biased.  


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners