Headwinds could be on their way for NUE
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Iron & steel stock Nucor Corp (NYSE:NUE) recently climbed from multi-year lows but stalled at the descending 50-day moving average, which could act as a short-term ceiling. This trendline also coincides with a significant May 2023 low at the $129 level.
The stock’s 10-day call/put volume ratio peaked above 10 around earnings, marking a four-year high and suggesting major optimism amongst options traders. This makes for a lower probability of a sustained move higher after earnings.
Furthermore, NUE could see headwinds from a shift in sentiment amongst the brokerage bunch. Though the shares are down roughly 31% year-over-year, nine of the 16 analysts in coverage sport a “buy” or better rating.
Shorts have been building their positions since the stock’s September lows, and may view the rally into resistance areas like this as a time to add to their positions, especially within the context of the new tariffs that threaten growth.
Our recommended put has a leverage ratio of 8.4 and will double on a 10.5% drop in the underlying security.