Cleveland-Cliffs investors should be beaming

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We recommended Cleveland-Cliffs (CLF) on October 8 and wrote that “traders who have used the dip to the 200 day line to buy should hold these positions. Traders who haven’t bought could do so here, risking a close below $ 18. The $ 42 area is our price target for late 2021 / early 2022. ”

Prices fell in November and December, but remained above our suggested level. Let’s review the latest charts and indicators.

In this updated daily bar chart from CLF, below, we can see that prices have slipped below the 200 day moving average line. The 200 day moving average line was successfully tested in September and prices held above it. This time, prices have slipped below that long-term average, but that’s just one way to look at the price movement.

If we look at the price movement since June and draw an imaginary line on $ 20, we can see a number of dips below $ 20 that have been bought. The current decline in December is similar to previous declines and a return above $ 22 will put prices above the 50-day and 200-day lines. The daily On-Balance-Volume (OBV) line has been going down for a long time, but shows improvement so far in December. The Moving Average Convergence Divergence Oscillator (MACD) has just moved higher for a buy hedge-short signal.

In this Japanese CLF weekly candlestick chart, below, we see some positive clues. Prices are trading below the 40 week moving average line, but two big lower shadows tell me traders are rejecting the lows. The weekly OBV line is different from the daily line, but here the picture is mixed with some recent improvement. The MACD Oscillator is pointing down and close to the zero line, but the start of some shrinkage will make things better.

In this daily points and numbers chart from CLF, below, we can see a bullish price target of $ 24.

In this weekly points and numbers chart from CLF, below, we have used closing price data only. Here, the software suggests the $ 36 area as a potential price target.

Result strategy: Long CLF traders should continue to hold. Traders who are flat could buy CLF at current levels. Continue to risk a close below $ 18. Our course targets are $ 36 and $ 42.


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