Steel Dynamics, STLD

Steel Dynamics Reported Second Quarter 2010 Results On Monday July 19, 2010, 5:19 pm EDT, which were below the expectations. Also the company provided a cautious near term guidance.

In spite of the not so good results and guidance, next day STLD shares closed 1.93% higher, even though the stock opened the day 1.86% lower. The volume traded that day was the bigger in more than a month.


Now this looks like good news, when a company reports and its price goes up is a positive sign but we know that a stock price movement is more than 60% group and market related. Let’s take a look at the steel group that day.


Steel closed 4.91% higher on July 20. STLD 1.93% gain don’t look so hot, in fact the stock lagged the group, also the market closed the day with a 1.14% gain.


However there’s still hope for Steel Dynamics

If the strength of the market and steel keeps on, we certainly will see up movement on STLD.

It is said that things come in threes in the stock market; STLD broke over its third downtrend line on Friday, signaling the possible beginning of an uptrend.


STLD is trading above the 10,20 and 50 days moving average, also the ma(20) looks ready to cross over the ma(50), a move that will align the stock and the averages in an uptrend.


Professionals buy strength and sell weakness, next week a couple of steel companies are set to report earnings, if the results are good, the group up movement will carry STLD.

Do you want to speculate?

Buy STLD if the stock closes over the upper 4 week channel, 15.10 looks like a good limit, allow a limit 5% down movement two or three days after the trade, then if the stock moves up set your sell stop below the ma(20).