The shares of Nucor Corporation (NYSE:NUE) are cooling since running into the $120 level in late November, with pressure forming at the formerly supportive 30-day moving average. While NUE looks ready to snap its nine-week win streak, the silver lining is this pullback has the steel stock trading near a historically bullish trendline, indicating a rebound could be right around the corner.
Digging deeper, Nucor stock just came within one standard deviation of its 160-day moving average, after spending a considerable amount of time above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred in the past three years. The security enjoyed a positive return one month later in 67% of those instances, averaging an 8.6% gain. From its current perch, a move of similar magnitude would put NUE at $117.90.
An unwinding of pessimism from the brokerage bunch could send the shares higher, as five of the seven in coverage still recommend a tepid "hold" rating. Meanwhile, the 12-month consensus price target of $116.09 is a 6.9% premium to NUE's current level of trading.
Further, a shift in the options pits could put more wind at the security's back. This is per Nucor stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 71% of readings in its annual range. Echoing this is the stock's Schaeffer's put/call open interest ratio (SOIR) which sits in the 91st percentile of its 12- month range. This means short-term traders have rarely been more put-biased.