Nucor in a very Tight Range

Published on Wednesday, 29 February 2012 09:20 Written by TradersHuddle Wire

New York, February 29th (TradersHuddle.com) - Shares of Nucor Corporation (NYSE:NUE) closed the trading session at $44.03 placing the price action in a very tight range, given that calculated support is set at $42.85 and the calculated resistance based on an algorithm of peaks and troughs is set at $45.18

Nucor Corporation (NYSE:NUE) manufactures carbon and alloy steel, steel joists, steel deck, cold finished steel, steel grinding balls, steel bearing products, and metal building systems. The company is based in Charlotte, NC

Nucor's stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to Nucor's price action, as any movement outside its predefined range of $42.85 and $45.18 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $42.85 could spark above average selling. A tiered approach can be a good way to approach starting a position in Nucor's, by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.