Cliffs Natural Resources (CLF) continues to power higher. Use any weakness to buy more is my suggested game plan for aggressive traders. Let's look at the updated charts and indicators.
In this daily bar chart of CLF, above, going back 12 months we can see a number of bullish upside price gaps with surges in volume. CLF is dipping a little this Friday morning, but it gaped higher yesterday with a huge high/low range and super strong volume. CLF is above the rising 50-day moving average line and above the rising 200-day moving average line. The On-Balance-Volume (OBV) line has been rising the past year and made a new high for the move up, confirming the rally and telling us that buyers have been aggressive in buying more shares of CLF. The daily Moving Average Convergence Divergence (MACD) has been above the zero line for much of 2016 and just turned up to a fresh outright long buy signal. All bullish.
This three-year weekly chart of CLF, above, continues to be a textbook bottom pattern. Prices are above the rising 40-week moving average line. The volume of trading has expanded the past year, which is what chart watchers want to see. The smoother OBV line is bullish and the MACD oscillator is, too.
We have included this monthly chart of CLF, above, to give you an idea of the next upside price target. We typically do not have a big need to look at monthly charts, but, here it makes sense. This chart shows that CLF held in the $20 to $30 area on the way down. This area of support is likely to be both a target for the move up and possible resistance. Splitting the difference, I would use $25 as the next major price target.
In this long-term Point and Figure chart of CLF, above, we can see that a major trend line is being broken and that $30 (rounding up) is the upside price objective.
Bottom line: Use available weakness to add to long positions. Risk below $8.50 for now.