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VIDEOMinyan Mailbag: Jumping Off Cliffs Natural Resources?
CLF doesn't look investment-ready - yet.
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Professor Depew,
Thanks for providing TD range projections on a daily basis. I'm wondering what your long-term view (2 to 3 years) is for Cliffs Natural Resources (CLF).
Thanks for your help.
Sincerely,
Minyan Jay
Dear Minyan Jay,
Taking a look at CLF across various timeframes, here's what I see in terms of DeMark price exhaustion:
On the monthly chart, you can see the TD Combo Countdown Sell 13 and TD Sell Setup 9, which printed concurrently at the high in June 2008. Now, CLF is attempting to form a buy setup (currently 7 of 9).
Click to enlarge
A potential 9 wouldn't be able to be recorded until May of this year, and even then, the low either next month or in May would have to exceed the low for the current month in order to perfect the buy setup. (Remember, in order to perfect a buy or sell setup, bar 8 or 9 must exceed the high/low of both bars 6 and 7).
Keep in mind, too, that -- because the red line at 36.75 was exceeded in a qualified manner (indicated by the fact the line is solid) -- this increases the probabilities that CLF may proceed to a countdown 13 if the 9 does record this spring. The last time CLF recorded a 13 TD Sequential Buy Countdown was at the low in October 2001.
The weekly chart isn't yet showing any signs of exhaustion on the downside.
The daily chart also isn't showing signs of downside exhaustion yet; note that the TD Combo Risk Level (solid purple line) was violated to the downside in a qualified manner at 13.07. That should act as resistance.
Click to enlarge
Bottom line: CLF doesn't yet look investment-ready.
Yours,
Professor Kevin Depew
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