Gerdau Ameristeel (GNA)

Company

"Gerdau Ameristeel is the fourth largest overall steel company and the second largest minimill steel producer in North America. The company has the capacity to manufacture over 8.4 million tons of mill finished steel products annually. Through an integrated network of minimills, steel scrap recycling facilities, and downstream operations, the company serves customers in the eastern two-thirds of North America." (company website)

Buy

7-Mar-05. GNA was only recently listed on the New York Stock Exchange. After a sharp run-up (see sidebar), it pulled back and is now pushing past the December high.

I hope last week wasn't GNA's last hurrah. Since I made my buy this morning, the price has drifted lower. It's seldom a good sign when a stock opens higher but then drifts lower to close down. The watchword is "watch."

19-Apr-05 Buying more of GNA when it has done nothing but fall since I bought it may be the height of stupidity. But— I believe GNA has bottomed out: Relative strength (RSI) is picking up, and GNA is no longer oversold (StochRSI). Price momentum (PPO) ticked sharply up this week, as did buying pressure (+DI), on strong volume. Money flow (CMF) is becoming less negative. And, although I don't usually put much stock in analyst ratings, another analyst started covering GNA today with a "buy" rating.

What I think has gone on with GNA is that it rose much too high much too fast and the correction has now played out. We'll see.

Sell

28-Apr-05. So much for the correction playing out. It was a good theory, but GNA fell sharply yesterday and today for no apparent reason. It's starting to look like that spurt on the 19th when I added to my position was the last hurrah.