NUE breaks back above 50-day moving average
Nucor Corporation (NUE) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NUE ended the month -2.01% lower at 41.41 after gaining $0.51 (1.25%) today, slightly underperforming the S&P 500 (1.54%). Closing above Monday's high at 41.35, the market confirmed its breakout through the prior session high after trading up to $0.29 above it intraday.
Daily Candlestick Chart (NUE as at Jun 30, 2020):
Tuesday's trading range has been $1.24 (3.05%), that's slightly below the last trading month's daily average range of $1.45. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NUE. Prices continued to consolidate within a tight trading range between 39.90 and 41.99 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on June 15th, NUE gained 6.37% on the following trading day. Regardless of a weak opening Nucor managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The stock managed to close back above the 50-day moving average at 41.27. Prices are trading close to the key technical resistance level at 41.68 (R1). After having been unable to move lower than 40.54 in the prior session, the share found buyers again around the same price level today at 40.40.
NUE shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 39.90 where further sell stops could get activated. As prices are trading close to June's low at 39.53, downside momentum might speed up should the market mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Nucor. Out of 310 times, NUE closed lower 53.23% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 54.52% with an average market move of -0.04%.