Nucor Corporation [[NUE]] broke a double top at $38. I bought shares and set my stop loss at $29.95.
Initial target is $53. Longer term target: $70.
It’s poised to break bearish resistance at $42, which is about where the 50-DMA sits. The reward-to-risk ratio on this stock is favorable at 2.12x and 4.54x, for the $53 and $70 target prices, respectively—based on my stop price. You can improve on that by setting a higher stop.
I’m scaling in with 1/3 of the money that I’m planning to commit to NUE, and will adjust my stop loss point(s) accordingly to maintain favorable risk / reward characteristics.
Nucor is the largest minimill steelmaker in the U.S., and has one of the most diverse product lines in the industry. It carries very low debt to equity (0.38), generates substantial free cash flow, and has a AA- credit rating from S&P. The dividend yield is over 5%.
However, this should be viewed as a stock to trade, since the outlook for the steel industry in the next 12 months is negative.
NUE has been beaten down and flat rolled from a 52 week high of around $83, but demand is coming back into the stock, as evidenced by the recent run up, and more recent breakout above $38.
Get some.
Disclaimer: “Get some” means do your due diligence before plunking down your bag of coins.
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