CLF finds buyers at key support level
Cleveland-Cliffs Inc. (CLF) Technical Analysis Report for Jan 28, 2020 | by Techniquant Editorial Team
Highlights
Overview
Moving lower for the 4th day in a row, CLF finished Tuesday at 7.16 losing $0.07 (-0.97%) on high volume, significantly underperforming the S&P 500 (1.01%). Today's close at 7.16 marks the lowest recorded closing price since November 14, 2019. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CLF as at Jan 28, 2020):
Tuesday's trading range has been $0.31 (4.23%), that's slightly above the last trading month's daily average range of $0.30. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CLF.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 7.06 earlier during the day, the share bounced off the key technical support level at 7.11 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move lower than 7.08 in the prior session, the stock found buyers again around the same price level today at 7.06.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 7.75. The last time this happened on September 4, 2019, CLF gained 4.48% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
2019's low at 6.59 is within reach and we might see further downside momentum should the market break out beyond.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Its common bearish interpretation has been confirmed for Cleveland-Cliffs. Out of 111 times, CLF closed lower 52.25% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.05% with an average market move of -1.09%.
Market Conditions for CLF as at Jan 28, 2020

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