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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • Cliffs Natural Resources Inc. (CLF) Is Bottoming Folks! 3 comments
    Apr 4, 2013 4:42 PM | about stocks: CLF

    A couple weeks ago I wrote an instablog on CLF which you can read here. seekingalpha.com/instablog/6143431-robert-edwards/1679381-i-like-cliffs-natural-resources-because-goldman-sachs-does-not This article is an update of that article.

    Based on past selloffs in CLF one can expect a rally of $10 to $12 from any low, similar to what was experienced from Dec. 4, 2012, to Jan. 2, 2013 when CLF rallied from 27.90 to 40.19. The current low is 17.95 unless one counts the pre-market low hit yesterday of 17.90. The 17.90 price is exactly ten dollars less than the December 2012 low. Why can't we have a similar rally now and hit $30.19 in 4 weeks, similar to what happened in December? I expect the rally to begin in earnest next week. Already trading ranges are getting tighter and volume is dropping. The shorts will realize soon that the stock is not going any lower for now and will begin buying to take their profits. When added to the bottom pickers, the buying should propel this stock to the $30 mark in short order. Watch closely when this stock retakes the $20 price level and especially when it fills the gap left from 21.43 that was caused by those Johnny-come-lately downgrades. One can indeed catch falling knife stocks when the falling stops and the stock stabilizes. We are seeing more stability by the day.

    Disclosure: I am long CLF.

    Stocks: CLF
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  • Robert Edwards
    , contributor
    Comments (446) | Send Message
     
    Author’s reply » I should add that last Friday CLF closed down 8 straight weeks. If the stock does not close above 19.01 on Friday, April 5, 2013 then it will be the 9 straight down weeks. Think of this as a roulette wheel coming up red nine times in a row. It is about time to begin betting on black.
    4 Apr 2013, 04:51 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (446) | Send Message
     
    Author’s reply » We closed 18.45 Friday so we now have 9 straight down weeks. Surely we go up next week. Enough already on these negative weekly closes! What a contrarian play this stock is. It has the worst stock performance of any stock in the S&P 500 for 2013. If it ends up taking out the 17.90 support level, I have calculated that 16.35 should hold on this downdraft. Don't believe the naysayers that are calling for a $10 stock price or worse. If it does go much below 16.35 it should rally first the $10 to $12 that I have been calling for.
    6 Apr 2013, 10:47 AM Reply Like
  • Robert Edwards
    , contributor
    Comments (446) | Send Message
     
    Author’s reply » I predicted 16.35 low holding and even though we make another 52 week low today, taking out 16.96 and trading down to 16.74, for the 3rd straight day, low prices are rejected. Thursday CLF closed in the middle of the range, Friday in the top 1/4, and today CLF closes towards the highs of the day. Looking for a bottom post earnings.
    22 Apr 2013, 07:04 PM Reply Like
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