NUE breaks below key technical support level
Nucor Corporation (NUE) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NUE finished the week -1.61% lower at 47.15 after losing $0.80 (-1.67%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 47.15 marks the lowest recorded closing price since August 27, 2019. Closing below Thursday's low at 47.73, the market confirmed its breakout through the previous session low after trading up to $0.93 below it intraday.
Daily Candlestick Chart (NUE as at Feb 14, 2020):
Friday's trading range has been $1.29 (2.69%), that's slightly above the last trading month's daily average range of $1.14. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NUE.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices broke below the key technical support level at 47.50 (now R1), which is likely to act as resistance going forward. The last time this happened on February 6th, NUE lost -2.30% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2019's low at 46.10 is within reach and we could see further downside momentum should Nucor break out beyond.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Nucor. Out of 566 times, NUE closed higher 53.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 52.65% with an average market move of 0.52%.