• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Cleveland-Cliffs Is Poised for a 'Cold Roll' Into Year-End

The bearish-looking steelmaker's fundamental downgrade was late to the party.
By BRUCE KAMICH
Oct 18, 2022 | 08:08 AM EDT
Stocks quotes in this article: CLF

A sell-side firm has cut their fundamental rating on steel maker Cleveland-Cliffs ( CLF) to "underperform" (sell) with a $14.30 price target. I am not so optimistic when I look at the CLF charts either. Let's look now.  
 
In the daily bar chart of CLF, below, we can see that the shares have tumbled lower from a zenith in March/April to a low in late September. CLF has been cut in half and still has not developed a new base pattern. The shares trade below the declining 50-day moving average line and below the declining 200-day line.
 
The On-Balance-Volume (OBV) line shows a decline from April that is still making new lows. A weak OBV line tells us that sellers of CLF have been more aggressive than buyers -- more trading volume is being done on days when CLF has closed lower. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and narrowing towards a new downside crossover and sell signal.
 
 
 
In the weekly Japanese candlestick chart of CLF, below, we see a "less than robust" picture. The shares are in a longer-term downward trend as they trade below the negative-sloped 40-week moving average line. There is a bottom reversal pattern in late September but there is also plenty of overhead chart resistance in the way of an advance.
 
The weekly OBV line shows a small recovery in the past three months after a very sharp decline. The MACD oscillator is bearish and may or may not cross to the upside for a cover shorts buy signal. 
 
 
 
In this daily Point and Figure chart of CLF, below, we can see that the shares have reached a downside price target of $14.  
 
 
 
In this weekly Point and Figure chart of CLF, below, we can see a potential downside price target in the $8 area. Single digits.  
 
 
 
 
Bottom-line strategy: This fundamental downgrade seems a bit late to the party as CLF has been in a decline for several months. Without a clear bottom pattern on the chart I would avoid the long side of CLF and look for lower prices into the year-end.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Metals & Mining | Industrials | Manufacturing | Analyst Actions

More from Stocks

The Mask Gets Yanked Off of Goldilocks Narrative

James "Rev Shark" DePorre
Sep 21, 2023 4:29 PM EDT

The bulls' story always sounded like a stretch, and now they will have to develop a new narrative to help drive a recovery.

Doug Kass: Risk Happens Fast. This Is All About to Get Real

Doug Kass
Sep 21, 2023 2:30 PM EDT

Caution and stock market congestion may lie ahead as interest rates stay higher for longer, while the stock market decline has now assumed a global character. Plus, more lessons from Howard Marks.

After Splunk Grab, Cisco's a Slam Dunk

Stephen Guilfoyle
Sep 21, 2023 11:54 AM EDT

I didn't like the idea of a cash deal at the start, but after going through the fundamentals, I think it's a wise move -- and here's why I'm adding the stock.

The Day After the Fed Meeting, I'm Gambling on This Stock

James "Rev Shark" DePorre
Sep 21, 2023 11:27 AM EDT

Here's why I like this gaming-related play, and why stocks could eventually offer some good entry points -- but not yet.

Whoa, We're (Only) Half Way There: Why the Correction May Have a Long Way to Go

Guy Ortmann
Sep 21, 2023 10:12 AM EDT

Four key indexes shifted their trends from neutral to bearish Wednesday.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:24 AM EDT BRUCE KAMICH

    This Could Get Messy

    A number of key stocks are getting close to import...
  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • 09:07 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The Most Common and Costly Mistake in Investing
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login