Can you read the signs?

Trading stocks is all about interpreting data and signs.

Just like a catcher in baseball, Wall Street tries to throw you a bunch of signals.

A sound trader sees the signals, interprets them properly and takes action at the right time.

Take yesterday, for example. A company called Nucor (NYSE: NUE) said this when it reported earnings:

End use market demand remains strong for steel and steel products, and we remain confident that 2022 will be another year of very strong earnings and cash flow for Nucor.

We expect that the second quarter of 2022 will be the most profitable quarter in Nucor’s history, surpassing the previous record set in the fourth quarter of 2021.

Second quarter earnings will be driven by increased profitability in the steel products segment, which continues to benefit from robust demand in nonresidential construction markets. In addition, the steel mills segment earnings are expected to strengthen due primarily to increased profitability at our sheet and plate mills. Similarly, Nucor’s raw materials segment is expected to generate increased profits in the second quarter due to relatively higher selling prices for raw materials.

That’s a strong statement.

So strong that it lit a fire under the stock despite a down market.

But even more importantly…

It was a signal.

A signal that other steel stocks like Nucor might report great numbers and enjoy a similar response.

This is what I posted in The War Room…

Karim R. 4/21/2022 at 9:56 a.m.
Nucor’s reaction to numbers could bode well for United States Steel and Cleveland-Cliffs.

Lo and behold… that’s exactly what happened.

This morning, Cleveland-Cliffs (NYSE: CLF), a major steel producer, reported blowout numbers, and the market rewarded the shares with a 10% pop in morning trading.

What’s the lesson here?

When you know how to read the signs, you can come away with a winning trade in less than 24 hours.

Here’s what one astute War Room member who doubled his money overnight had to say…

Scott G. 4/22/2022 at 9:32 a.m.
CLF Apr 22 2022 $30.50 Call (Weekly) – in yesterday at $0.78, out just now at $1.60. Thanks for that earnings play nugget yesterday, Karim!

Action Plan Our ability to interpret Wall Street’s signals has allowed us to achieve a 77% win rate in The War Room – despite a tough market in 2022. Join us now so you can hop on the next Cleveland-Cliffs trade!