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Cliffs Natural Resources Inc. (CLF) Is Still Bottoming Folks!

|Includes:Cliffs Natural Resources Inc. (CLF)

I wrote an article on 4/4/13 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