Nucor Corp. (NUE) got a thumbs up from Jim Cramer during the Lightning Round of Wednesday night's Mad Money program but I have my technical reservations and concerns as NUE is in a downtrend at this juncture.
Let's check out the charts and indicators this afternoon.
In this daily bar chart of NUE, below, we can see that prices have been moving from the upper left to the lower right of the page or another way of saying that prices have been in a downtrend. NUE bounced from late October to the middle of November and failed at the underside of the declining 200-day moving average line. Prices are now back at the October nadir and below the bearish 50-day moving average line.
The daily volume pattern and the On-Balance-Volume (OBV) line have moved up and down with the price action so I cannot say whether buyers or sellers have gotten the upper hand.
Currently the Moving Average Convergence Divergence (MACD) oscillator is bearish as it is pointed down below the zero line.
In this weekly bar chart of NUE, below, we can see that NUE broke a longer-term uptrend this year and is now trading below the declining 40-week moving average line. There is a lot of potential chart support around the $55 area so prices may hold here.
The weekly OBV line has been neutral for months while the weekly MACD oscillator slipped below the zero line in October for an outright sell signal.
In this Point and Figure chart of NUE, below, we can see a nearby price target of $52.69 being projected. This does not represent much of a decline but it would break the support around $55 as prices made new lows for the move down.
Bottom line strategy: Will NUE hold the $55 area or not? I do not give it strong odds.