Steel on Fire

Add NUE January Calls

By Bryan Bottarelli
Thursday, December 07, 2006 12:53 PM EST
Thu, 7 Dec 2006 17:53:00 GMT

Dear Bottarelli Research Member,

Steel stocks haven been on fire, and it looks like the upside run is nowhere near over. In fact, new developments are making the top steel names more attractive then ever.

For example, yesterday Nucor (NUE – NYSE) declared a supplemental cash dividend of 50 cents a share on top of its regular quarterly dividend of 10 cents a share. This total dividend of 60 is payable February 9th to stockholders of record as of December 29th. As a result, I’d expect to see increased buying interest in NUE throughout the month of December. In fact, a quick look at the chart shows that NUE has been on an incredible run — setting new high after new high, and I’d like to be along for the ride.

NUE

With NUE in full-blown rally mode, let’s get positioned in January calls. Here’s the play:

PLAY: Buy the NUE January 65 Calls (NUE AM) at or under $5.50, good for the day. Current bid/ask spread is $5.10 to $5.50. Place a protective stop loss at $3.90.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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