Looking for a Double on Cleveland-Cliffs

Shares of the steelmaker followed our September 'script.'

We looked at the charts of steel-maker Cleveland-Cliffs (CLF) on Sept. 9 and wrote that "Traders should be prepared for a possible dip toward the rising 200-day moving average line. If this correction occurs you should treat it as a buying opportunity for longer-term gains to the $36 area."

The shares tested the rising 200-day line at the end of September and earlier this month so traders got the opportunity to buy CLF.

Let's see how things are progressing.

In the daily bar chart of CLF, below, we can see that the shares followed our September "script" and tested the rising 200-day moving average line. Traders got a buying opportunity at a good price and technical juncture. Prices are turning upwards again and we could soon see a test of the 50-day average line.

The On-Balance-Volume (OBV) line has held steady since late June and I look forward to renewed strength. The Moving Average Convergence Divergence (MACD) oscillator just crossed to the upside for a cover shorts buy signal.

 

In the weekly Japanese candlestick chart of CLF, below, we can see a mixed picture. Prices are in a longer-term uptrend above the rising 40-week moving average line. The test of the 40-week moving average line looks successful.

 

The OBV line may have made a low and the MACD oscillator is ready to narrow.

 

 

 

In this daily Point and Figure chart of CLF, below, we can see it is now showing us an upside price target of $23. A month ago the target was bearish.

 

 

In this weekly Point and Figure chart of CLF, below, we used a five-box price reversal filter. Here the software suggests a target for CLF in the $42 area.

 

 

Bottom-line strategy: Traders who used the dip to the 200-day line to buy should hold those positions. Traders who did not buy could do so here risking a close below $18. The $42 area is our price target for late 2021/early 2022.

 

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