Nucor Corp. (NUE) reports its second-quarter earnings this morning. I will leave analysis of the numbers, details and guidance to others as I focus on the price action and volume. Divide and conquer, I say. So, let's jump into the charts this morning before the results come out for the steelmaker, which is a holding in Jim Cramer's Action Alerts PLUS portfolio.
In this daily bar chart of NUE, below, we can see a possible large triangle formation or consolidation on the chart from December to now. Prices are very close to the apex of the pattern, so a breakout -- up or down -- is anticipated.
Nucor has made higher lows from September to November to late March and early April and again earlier this month. Starting with the high made in January, NUE has made lower highs in March and June. Notice how the up and down swings of this pattern have gotten shorter in terms of dollars? Notice, too, how the level of trading volume has declined from December to July? This is typical of this kind of chart pattern. The height of the pattern is about $12, and this is added to the breakout (should it happen) to give us a target of around $78.
The 50-day moving average line has turned up and down the past six months, but now prices are above this rising indicator. The slower-to-react 200-day moving average line was tested successfully a number of times and is still bullish. The daily On-Balance-Volume (OBV) line has been neutral all year. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been crossing above and below the zero line for months, but it recently crossed upward for a cover-shorts buy signal.
In this weekly bar chart of NUE, below, we see a bullish pattern in the indicators. Prices are above the rising 40-week moving average line. The weekly OBV line shows a bullish rise from early 2016 and the weekly MACD oscillator is poised to turn up to a fresh outright buy signal.
In this Point and Figure chart, below, we just look at the price changes of a particular percentage movement. Small moves are filtered out and volume is ignored. NUE is currently in an "up column" with "X's" and a possible price target of $72.63, which if reached would be a new high for the move up.
Bottom line: Technical forecasts right in front of an earnings release can be a nail biter -- great if you get it right and demoralizing if you get it wrong. The best strategy right now, in my opinion, is to buy strength above $68 and risk below $62.