Steel maker Nucor (NUE) is another stock that's been trending higher since the summer bottom in stocks -- only this firm hasn't been consolidating sideways. Instead, Nucor's uptrend is still very much intact.
So, with an uptrending channel in play, should you buy this stock now? Nope.Ultimately trendlines break, and if NUE's does, you don't want to be left holding the bag. That's why it's important to actually wait for the bounce off of trendline support before buying this stock. Clearly, the best time to buy a stock that's in an uptrending channel comes at support -- it's the place where shares have the furthest to move back up to resistance (the top of the channel) and where they have the least distance to move through support. Waiting for a bounce ensures that CCI can still catch a bid at that trendline. Since a breakdown below support means that the channel is broken, support is also a logical place to put a stop below to ensure minimal risk.
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