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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 Still Bottoming Folks! 4 comments
    Apr 22, 2013 5:27 PM | about stocks: CLF

    I wrote an article on 4/4/13 seekingalpha.com/instablog/6143431-robert-edwards/1722651-cliffs-natural-resources-inc-clf-is-bottoming-folks where I explained how Cliffs Natural Resources Inc. is bottoming. If you have not read it, I recommend clicking on that article now. Well, CLF is still bottoming and is begging to be bought. Earnings will be announced on Wednesday, 4/24/13 prior to the market opening so there is only one more day to trade prior to earnings. With the $17 area showing good support, it might be prudent to buy some shares now and to add on any weakness post earnings.

    Lower Prices Are Being Rejected

    Today we again made a 52 week low, and again those lower prices were rejected as we closed above the opening and near the highs of the day. Today we completed a Japanese Candlestick hammer formation which is a bullish formation that suggests higher prices to follow. With the extreme bearishness and high short interest, there could be some decent short covering prior to and especially post earnings. When the shorts wake up to the fact they can't knock it any lower, they will be forced to cover, causing one heck of a short-covering rally. If you like to play short-covering rallies, this stock is one to play. Barron's Magazine was bullish on the stock when it was trading at 36 and they have not changed their opinion now that the stock is trading in the mid 17s. Even momentum player Jim Cramer won't tell traders to get out at these give away prices. It cannot be long before we get the 10 to 12 dollar bounce that CLF likes to make off of extreme lows. I am playing the long side until I see that bounce, and anticipate a strong move up following earnings to the $28.50 to $30 dollar price level where I anticipate taking profits and then buying back on a retest of the lows. I will remain exposed long through earnings because at this point, I do not see how they can kill this stock any more than they already have. This stock is already dead and is now just waiting to be resurrected.

    Disclosure: I am long CLF.

    Stocks: CLF
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  • Robert Edwards
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    Author’s reply » CLF article stated earnings would come out pre-market but I found out this morning they were coming out after the close. CLF got a relief rally post earnings, popping to 19.80 this evening before coming back to earth around 19. I am looking for a gap up tomorrow morning, 4/25/13, that holds and we build from there. I do not want to see us open on the highs and then fall the rest of the day. That is a sign that we have to trade back lower and we have more work to do on the downside. Tomorrow is the real "tell" for this stock. In any case, I will be buying on all dips in this stock until we get that $10 to $12 rally.
    24 Apr 2013, 10:40 PM Reply Like
  • Robert Edwards
    , contributor
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    Author’s reply » Well, we held great on the opening pop and have moved to 21.40, taking out a recent top of 21.31. The bottom is definitely in folks, as Credit Suisse and others turn bullish on this stock thanks to a 25 cent beat on earnings and excellent guidance. All dips are buys.
    25 Apr 2013, 10:22 AM Reply Like
  • Robert Edwards
    , contributor
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    Author’s reply » CLF chart looks amazing with the big gap up. The $20 area should provide great support for several days as well as $21. I anticipate we have at least two more up days before we get a down day. The first time we get a down day it should attract buyers and then rally two more days after that. Hopefully this rally last for at least a week.
    25 Apr 2013, 10:31 PM Reply Like
  • Robert Edwards
    , contributor
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    Author’s reply » Inside day lower today, penetrated but closed above 20 support. This first down day should be followed by a couple up days....hopefully we take out 22 resistance and shoot for 24....time will tell.
    26 Apr 2013, 05:52 PM Reply Like
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