NEW DIRECTIONAL CALL PLAYS

NUCOR Corp. - NUE - close: 45.34 change: +0.72 stop: 41.75

Why We Like It:
Some of the metal stocks have been showing relative strength. NUE has managed to breakout over resistance at $44.00, at $45.00, at its 100-dma and at its exponential 200-dma. Shares do look a little bit overbought here. I would open call positions now but keep your positions small. Only 1/2 or 1/4 your normal size. Then if we see NUE correct back toward $44.00 we can choose to double down and increase our position on a dip or a bounce. Our multi-week target is $49.50.

Suggested Options:
We will plan to exit ahead of the late January earnings report. I'm suggesting the February calls. My preference is the $45 strike.

BUY CALL FEB 45.00 NUE-BI open interest=448  current ask $2.35

Annotated Chart:

Entry  on  December 22 at $ 45.34 (1/2 position or less)
Change since picked:       + 0.00
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        4.5 million  
Listed on  December 22, 2009