Why Joe Terranova Bought Nucor Stock Today

Nucor Corp NUE looks like it's breaking out of a technical formation following about two months of consolidation.

Virtus Investment Partners' Joe Terranova initiated a position Wednesday as he expects the stock to perform well in 2022.

"This is a cheap stock and this is a stock that is breaking out technically and its liquidating the pessimism," Terranova said on CNBC's "Fast Money Halftime Report."

Terranova's Thesis: When the company released its earnings expectations for the fourth quarter of 2021, the stock sold off and that was the time to buy it, Terranova said. However, he still thinks it should be bought at current levels because of "the liquidation of pessimism."

See Also: 8 Materials Stocks Moving In Wednesday's Intraday Session

Steel prices peaked in the middle of 2021 and they aren't expected to recover so expectations have come down, he said. With the stock breaking out to the upside, the pessimism surrounding the name is easing.

"I'm very willing to step into that trade right here with the stock trading somewhere around $125," Terranova said. "I think it goes a lot higher. I really do."

NUE Price Action: Nucor has traded as low as $47.93 and as high as $128.81 over a 52-week period.

The stock was up 6.53% at $124.72 Wednesday afternoon.

Photo: courtesy of Nucor.