Steel Dynamics (STLD) has been in a strong rally from early 2020 and further gains look likely. Let's check out the condition of the charts and indicators.
In this daily bar chart of STLD, below, I can see that prices broke out on the upside from a seven month triangle formation in October. STLD trades above the rising 50-day moving average line as well as the rising 200-day line.
The On-Balance-Volume (OBV) line shows a rise from July as traders became more aggressive buyers. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but poised to cross to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of STLD, below, I see a bullish picture. Prices are in a longer-term upward trend as they trade above the rising 40-week moving average line. The candles do not show a top reversal pattern and only one rejection of the prices above $130.
The OBV line has been strong and made a new high to confirm the price gains. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of STLD, below, I can see a potential upside price target in the $156 area.
In this second Point and Figure chart of STLD, below, I used weekly price data. Here a price target of $160 is shown.
In this third Point and Figure chart of STLD, below, I used weekly price data with a five box reversal filter. Here the price target measures to the $221 area.
Bottom line strategy: All my selected charts and indicators on STLD point to higher prices in the months ahead. Buy available weakness below $120. Risk to $105.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.