In the "Executive Decision" segment of Mad Money Tuesday night, Jim Cramer checked back in with John Ferriola, chairman, president and CEO of Nucor Corp. (NUE) . Nucor is the steelmaker which just posted an earnings beat, closing out a record year thanks to new tariffs on Chinese steel.
Ferriola said that thanks to the tariffs, which have finally created a level playing field, not only was Nucor able to have a record year, but many of their customers were as well. Ferriola said Nucor remains committed to returning 40% of their earnings to shareholders via their dividend and stock buyback program. Let's check out the charts this morning.
In the daily bar chart of NUE, below, we can see a downtrend that looks like it is in the process of reversing. Prices show a pattern of lower lows and lower highs until recently. In January we can see a rally that has done a number of positives -- broken above chart resistance around $56, closed above the bottom 50-day moving average line, and made higher highs. In addition, we can see a volume spike at the December low to help mark a reversal to the upside.
The daily On-Balance-Volume (OBV) line has improved this month telling us that buyers have started to become more aggressive. Last, the Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line for an outright go long signal.
In the weekly bar chart of NUE, below, we can see a rally from early 2016 and a "rolling over in 2018." Prices are just below the declining 40-week moving average line and we could see prices close above this line this week.
Despite the price decline last year the weekly OBV line has been steady or neutral. The weekly MACD oscillator has crossed to the upside from below the zero line for a cover shorts buy signal.
In this Point and Figure chart of NUE, below, we can see an upside price target of $73.41 being projected.
Bottom-line strategy: It looks the materials' sector and NUE are going to move higher in the weeks ahead. Aggressive traders could go long NUE here and on any shallow dip. Risk a close below $56 looking for the mid-$70s on the upside.