STLD/CLF/NUE -- Potential buying opportunity AFTER earnings

This is a big week for American steel with earnings for STLD this afternoon, NUE thursday morning, and CLF on Friday morning. Historically (the past few earnings) for these companies see dips in the stock price after announcement. Earnings have been stellar the past few quarters and we’ve still seen dips on earnings. This has usually been followed by a significant run in the next few days/weeks.

Buying in on a dip after earnings are released may be a nice play for decent gains over the following few weeks or months. This is based on a very strong earnings from these companies due to high steel demand and low supply worldwide. It is believed by many that these companies are currently undervalued because the market has not yet priced in a medium or long term boost in earnings for these companies due to uncertainty about how long this steel supply/demand situation will stay around.

For consideration, reasons why there might not be a dip (and instead runs on/after earnings):

  • The market in general has been shit on the past few weeks, and steel tickers were on a pullback from 52-week highs. It is possible that the dip is already here, in which case earnings may show a bump or even just be flat. I’d still expect a run after earnings in this case. There could be a bunch of catalysts lining up for a bump off great earnings. Buying shares or near the money January (or further) calls now (on CLF/NUE) would be a safer play if you don’t want to miss out.
  • It’s also possible that we see a significant dip before earnings, in which case we could just see a small dip, bump, or just continuation of the trend from earnings.

Reasons why steel might not run after earnings:

  • Market takes a shit and takes everything else with it.
  • Earnings are weaker than expected (they should be better than last earnings)
  • We see a very very strong run up to earnings (very unlikely IMO)
  • some other bearish news comes out for steel/commodities.

Nothing is guaranteed of course, and I haven’t played these tickers very well in the past. I hope to change that this time but as usual make sure you know what you’re getting into if you buy.

EDIT 3:15PM 10/18/2021:

Strong uptrend all day after the dip for CLF/STLD/NUE. Still roughly around open price though. This isn’t necessarily indicative of an uptrend for the week. STLD earnings this afternoon will probably affect the other american steel stocks indirectly, so tomorrow will be important to watch. I’d wait to get in until tomorrow.

EDIT 4:52PM :
Very strong earnings as expected for STLD, AH movement looks good for STLD so far, but need to see how the market reacts tomorrow morning too. I think any dip from here could be a decent medium term play, potentially a re-test of previous ATH at around 74, and possibly break of the ATH if the market and news cooperates.

No idea how this will affect CLF/NUE just yet. There isn’t much sympathy movement from them in AH so far, at least not in terms of volume. I expect CLF and NUE earnings to be just as strong as STLD earnings, so their prices may react similarly unless they run up significantly before their earnings. They could definitely still dip on earnings though.

EDIT 10/19/2021 10am :
If you’re looking to get into STLD, I would start watching now. It could possibly dip further but this is the dip after earnings I expected. Medium-long term hold here, December or even January and further to be safer, and don’t go crazy OTM. CLF and NUE are worth watching for entry too, even before their earnings. Don’t overleverage, leg into your positions.

EDIT 1:15PM:
Uptrend holding on STLD so far. It’s possible this just runs the rest of the day. I wouldn’t be surprised to see a slightly red day tomorrow or thursday if this happens. Make sure to take profit when it looks good to you, I already took a nice chunk from my November calls. These things move relatively slowly compared to the fast-paced plays more common around here. It’s rare to see straight green without a few dip buying opportunities. I still expect these tickers to retest previous highs from back in August in the next few weeks ASSUMING the market continues its recovery and no major bad news comes out which hurts commodities/steel

In terms of plays to look out for, CLF is still relatively weak, most likely due to upcoming earnings. I think we might still see a dip across the steel tickers the next few days, but a dip on earnings for CLF/NUE is uncertain now that STLD is running. It might be worth considering an entry into December+ calls or shares in the next couple days before earnings if we see a nice dip. ITM or near OTM would be ideal. Also want to point out that the December calls aren’t necessarily meant to be sold in December. You want to trim these as you see profit you like and/or roll out to further out dates as we get closer to expiration if you think there is still an uptrend. When these things dip they dip for a few days or even weeks, you don’t want to baghold on the way down and get hit with theta decay

EDIT 1:30PM:
Here is some weakness on CLF and STLD, consider trimming some profits here as I wouldn’t be surprised if we just see a slow bleed into close, which might bring another buying opportunity. OR just hold if you bought shares or far out options, these dips shouldn’t mean much if you have patience

EDIT 2:10PM:
It’s looking like what I said in my last edit will be the case. If you want an entry, I’d wait til around 3 or 3:30 today to start legging in. There is still a chance this dips a bit further tomorrow morning, so, again, December or even January ITM or near OTM strikes are ideal I think

EDIT 3:30PM:
Final update for today, STLD peaked and bled slowly as expected, CLF/NUE behaved similarly most of the day but aren’t quite matching STLD’s downward movement here. This makes sense to me because this sector moves roughly as a unit and STLD moved much more than the others today. I have no idea how these will open tomorrow from this close. I still think this is a decent time to open safer positions. If we see a significant dip tomorrow morning, more near-dated strikes might be a nice play ( only if you can day-trade, I expect a similar pattern to today in that case).


These earnings drops are phenomenon that we followed quite a bit. Algos aren’t very good at reading, as we know, and often get the bullishness of earnings reports wrong. We’ve seen stocks with record earnings and bullish outlook tank the second the report comes out and fail to recover for a day or two (most recent I can remember was NVDA).

So should the earnings from these companies be bullish (or for most companies, but that’s for another thread) buying the dip is often extremely profitable. Looking forward to seeing how this plays out.


Very interesting, nice post Dag. I won’t get in but will be watching it closely with you.


we might see a continuation of the earnings pattern that has been observed before.

On the 18th October 2021 STLD dipped before open then went up all day,
On the 19th of October STLD dipped right before open and kept dipping until 9:50. then it went up all day.

After Q2 earnings on the 20th of July we saw the same sell of on the day of release.
The 22th of July we saw a dip at open then a rip all day.
23th dip at open and rip all day.

I don’t think we will have a big dip this morning, if it dips and touches the 61’ish level i feel november 19th 65 calls will be higly profitable. Even if it stagnates today it will be a decent hold.

Would love to hear your input.

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