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Nucor - NUE - close: 53.60 chg: +1.83 stop: 49.95

Company Description:
Nucor and affiliates are manufacturers of steel products, with operating facilities in fifteen states. Products produced are: carbon and alloy steel - in bars, beams, sheet and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing. Nucor is the nation's largest recycler. (source: company press release)

Why We Like It:
The broad market bounce is likely to give shares of NUE a boost as investors respond to its positive earnings report. The company reported earnings today that were well above analyst estimates. Profits actually tripled from the same period a year ago. The company also reaffirmed its Q2 guidance and raised its dividend. We believe that bargain hunters will also be drawn to the technical picture. Not only is NUE oversold from five weeks of declines but the stock is bouncing from support. NUE has price support and technical support in the $49-50 range and this looks like a good spot to speculate on a stronger rebound. Short-term technical oscillators have turned positive. However, it's worth noting that the P&F chart is currently bearish. We want to see confirmation that NUE has indeed reversed course. Our suggestion is to use a TRIGGER at $55.05. There could be round-number resistance at the $55 level in addition to its 100-dma. We can wait for NUE to trade at $55.05 and then target a move toward $60.00 or higher. We are using a very wide stop loss and traders may need to adjust it for their own comfort level.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 50.00 NUE-FJ OI=194 current ask $5.60
BUY CALL JUN 55.00 NUE-FK OI=405 current ask $2.70
BUY CALL JUN 60.00 NUE-FL OI=163 current ask $1.10

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/21/05 (confirmed)
Average Daily Volume = 3.3 million
 

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