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Registered User
Joined: 8/11/2005
Posts: 26
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The market is due for a pullback and NEU looks like a good short to me. What do you think?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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It depends how nimble you are.
It seems to have had only 2 bad days in April and 2 in March.
The stock is volatile moving from 2 to 4 points a day.
If you are correct you will probably be very correct.
Thanks
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Registered User
Joined: 12/8/2004
Posts: 1,301
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I think you want to look for better short candidates. This stock has stayed in a 2% channel for seven months.
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 Gold Customer
Joined: 4/10/2006
Posts: 954
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I think what you are seeing is a DOUBLE exhaustion, and some one knocking out the stops.
Scenario 0) Someone confused NUE with NEU
scenario 1)
1) this is a low float 14M stock
2) over 30% insider ownership
3) broke out jan6, quick check on the break and zoom, 60d later DOUBLE.
4) the fundamental P/E, P/S, EBITA, all look excellent and this stock is just catching up with these fundamentals in a sector(oil, fuel, fuel products) which has been on fire.
People like to double there money and when they do they will place stop orders, in this case on 4/6 when this hit $52 many stops were already in. As these piled up either someone who could see these orders or guessed them and made a play on 4/7 4/10 4/11 4/12 then normal market and volume returned.
scenario 2)
Low float, high insider ownership, company has some TRUE problem developing and the ship is leaking.
?Fundamentals are eroding?
Scenario 1) says go long, stay long with sector support. Buy stock buy put.
Scenario 2) says your short might work. If it falls back through 50, you might take a bite. support at 48. 48.20 then 44 and 42.30
personally I side with HNC's comments.
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Gold Customer
Joined: 4/10/2006
Posts: 954
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In fact I may have just given you a good formula for finding a SHORT. You would have to have some balls to ride it, the run up on those two days was 52..57 then down to 42 back to 46 with no news. (what a ride)
It could have also occured naturally triggered by just a few day traders not necessarily a market maker or anyone.
volume of 380k, 1.5m, 1.7m, 700k for a stock that averages 200-300k
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