Is Nucor Ready for a Break Out?

Published on Wednesday, 18 July 2012 09:00 Written by TradersHuddle Wire

New York, July 18th (TradersHuddle.com) - Nucor Corporation (NYSE:NUE) closed the trading day at $38.28, near its 50 day and 200 day moving averages set at $36.86 and $39.55 respectively. Nucor's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

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 seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in Nucor and wait for the stock to break out above the 200 day moving average at $39.55. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $36.86 breaks, it could signal further downside for Nucor in the horizon.