Gerdau S.A. produces and commercializes steel products worldwide. The
company provides crude steel products, which include billets that are
used to manufacture wire rods, rebars, and merchant bars; blooms for use
in the manufacture of springs, forged parts, heavy structural shapes,
and seamless tubes; and slabs, which are used in the steel industry for
the rolling of various flat rolled products, as well as to produce hot
and cold rolled coils, heavy slabs, and profiles. Its long rolled
products comprise rebars, merchant bars, and profiles, which are
primarily used in the construction and manufacturing industries; and
drawn products, such as barbed and barbless fence wires, galvanized
wires, fences, concrete reinforcing wire mesh, nails, and clamps for
manufacturing, construction, and agricultural industries.
Take a look at the 1-year chart of Gerdau (NYSE: GGB) with the added notations:
This one’s pretty simply. After finally breaking $7.50 in January,
GGB couldn’t get out of its own way for the next 2+ months. Starting in
March the stock found a repeated area of support at $5.75 (green). GGB
finally broke that support about a week ago and is now trying to hold
$5.50. The stock should be moving overall lower from here even if a
brief rally ensues first.
The Tale of the Tape: GGB had a key level of support
at $5.75. Now that the stock has broken support, a trader might want to
enter a short trade at or near the $5.75, or on a break below $5.50,
with a stop placed above the level of entry. A break back above $5.75
could negate the forecast for a move lower.
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