In his first Executive Decision segment of Monday's "Mad Money" program, Jim Cramer spoke with Lourenco Goncalves, chairman and CEO of steelmaker and iron ore producer Cleveland-Cliffs (CLF) .
Goncalves said one of the most important decisions he made after becoming CEO was to bring back the company's original name, Cleveland-Cliffs. The post-COVID world will be an unforgiving one, Goncalves said. Between supply chain disruptions, port congestion, environmental impacts and political concerns, manufacturing is returning to the U.S. from overseas, and Cleveland-Cliffs will be there with the iron ore and steel they need, he said.
We reviewed the charts of CLF last week on April 22 and wrote that traders should continue "to hold longs acquired in the $19-$18 area. Continue with the stop protection below $15 for now. Add to longs above $19 and look for gains to the $33 area in the weeks ahead."
Let's check the charts again.
In this updated daily bar chart of CLF, below, we can see that prices held the rising 50-day moving average line when prices pulled back this month. The slope of the slower-to-react 200-day moving average line is positive. The On-Balance-Volume (OBV) line turned upward in the past week, telling me that buyers of CLF have turned more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has narrowed and is poised to cross to the upside for a fresh outright go long signal.
In this weekly Japanese candlestick chart of CLF, below, we see a bullish picture. Notice the two large lower shadows in March and April as traders rejected the lows. The 40-week moving average line is positive. The weekly OBV line has been stable the past three months. The MACD oscillator is flat with the two moving averages that comprise the indicator right on top of each other. This situation could easily resolve itself to a new buy signal if prices strengthen from here.
In this daily Point and Figure chart of CLF, below, we can see a tentative upside price target in the $22 area.
In this weekly Point and Figure chart of CLF, below, we can see a potential $30 price target.
Bottom line strategy: Traders should continue to hold previously recommended long positions. Our price targets are $22 and then $30. Continue with the $15 sell stop for now, but we are looking to raise it when CLF rallies above $21.
