Somebody Is Still Shorting $NUE. The Data Says They May Regret It

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Somebody is still shorting Nucor into this, and the FINRA data doesn't care about anyone's opinion. It counts.

$NUE sits at $267.21, $4.43 below its 20-day high of $271.64 and $38.01 above its 20-day low of $229.20.

My read: lean bullish. Buyers are close enough to force the issue, but I want volume before I call it a breakout.

Pressing into strength

Against its own 60-session range, $NUE is 4.6% below the high of $280.11 (Aug 5) and 16.6% above the low of $229.20 (Oct 1). $NUE closed higher in 6 of its last 9 sessions.

Volume over the last five sessions was in line with the twenty sessions before them (1.0x). The largest one-day move in the past twenty sessions was +5.2% on Oct 27.

74% of NUE's off-exchange volume printed as short sales (FINRA daily short volume).

The stock is already running: shorts are losing, not waiting.

What I make of it: a crowded short matters only if the stock stops falling, and then covering becomes buying. Whether that starts here is the whole question.

What the market looks to be pricing in

Off-exchange trading: NORMAL: $2.1M block at $270.83, under half yesterday's biggest. Biggest single off-exchange print: 7,739 shares at $270.83, about $2.1M, on a downtick (seller hit). A print that size is one order being crossed away from the public book, not a crowd of small trades. Across the broader market, the read is Neutral (bias +10).

Insiders: quiet.

On the daily chart, technical patterns include tweezer_bottom, long_legged_doji, spinning_top in a flat trend. Price is above its 20-day average of $253.02 by 5.6%. Over the last twenty sessions the stock has moved +13.1%.

What I make of it: the pieces mostly point the same way as the price, which is more than I can say for most setups. None of them is proof.

The bull case

• Short squeeze setup with a measured path to $304.62

The bear case

• Backdrop: Neutral (bias +10)
• Borrow cost decides who exits first

The part nobody is talking about

What I think traders are overlooking is the volume. Price can drift to a level on almost nothing, and what it does there needs real participation. Without it, a break is easy to fade.

The price alone doesn't show it.

If I'm right, and what proves me wrong

If $NUE posts a close above the recent high on rising volume and volume expands, I think $304.62 becomes the next serious test. Under $240.49, I'm wrong.

The honest objection is that short volume is not a short position. A high ratio is routine in liquid names, and sometimes the shorts are simply right.

That's the whole trade: a level to clear, a line that proves me wrong, and not much in between.

Kill switch

Any one of these and the thesis is over, no averaging down, no renaming it.

• A close through $240.49.
• Selling absorbs the buying at a key level and price loses it on volume.
• Order flow reverses: the sweeps and blocks turn to the other side.
• A scheduled event changes the picture before the trigger is reached.

What I'm watching

Buyers are close enough to force the issue. I want the volume before I call it anything more than a lean.

Desk record. 10 of 44 scenario targets traded before their invalidation (23%), 26 stopped out, 8 ran out of time, average outcome +1.71% per piece. Past pieces say nothing about this one.

The desk's scenario leans bullish. Bull or bear, the kill switch above is what keeps either view honest.

Sources and further reading: SEC EDGAR filings for NUE · FINRA daily short sale volume files · Nasdaq short interest: NUE · Nucor Corporation investor site · NUE quote, chart and data on StockMarketLoop.

Data as of Oct 27, 11:03 AM ET: options positioning, FINRA short volume, the off-exchange trade record, the structure map, SEC filings and the ticker's headlines. Vaughn McNair (Grandmaster-Obi) and Making Easy Money may hold or trade positions in the names discussed. This is speculation and education, not financial advice.