Steel Dynamics (STLD) is the third largest producer of carbon steel products in the United States. With the shares hitting a 52-week high on Wednesday, a Real Money subscriber asked about its technical prospects.
Let's check out the charts and indicators.
In the daily bar chart of STLD, below, we can see that the shares broke support in January but managed to come roaring back to the upside in the past five weeks. STLD has broken out over its August high. Prices are trading above the rising 50-day moving average line and the bullish 200-day moving average.
Trading volume and the On-Balance-Volume (OBV) line have risen in the past five weeks and confirms the price gains. The OBV line is close to making its own new high. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of STLD, below, we can see that shares have done well since the early 2020 low. Prices corrected lower the past five to six months but the new high for the move up shows us that the bull move has resumed. Prices are above the 40-week moving average line.
The weekly OBV line has made a new high for the move up to confirm and support the price gains. The MACD oscillator just turned upward to a new outright buy signal.
In this daily Point and Figure chart of STLD, below, we can see that prices have broken out on the upside from a lengthy sideways consolidation. STLD has reached a $74 price target.
In this weekly Point and Figure chart of STLD, below, we can see a potential upside price target in the $123 area.
Bottom-line strategy: Traders could buy available price weakness on STLD risking to $66 for now. The $123 area is our price target after the round number of $100.
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