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.
