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Stock Pick Cleveland-Cliffs, Inc (CLF) Up 45% Since Our Buy Recommendation
By Geoff Green | May 21, 2008
The Stock Picks list included Cleveland-Cliffs, Inc. (stock symbol CLF) in our best stock pick list on the bullish stock alert in early April
Since that time CLF has been a top stock pick and trading in this stock has yielded an explosive profit.
But is this stock pick ready for sale or should you hold for more profit?
If you had been following our suggested trading strategy you would likely have sold this stock at a profit of 30% within a few weeks. Common to many top stock picks there is the possibility that they will go on to further new highs after you sell and take your profit.
However, keep in mind that technical analysis of this stock market still shows that we are in a bullish rally in a longer term bearish trend so our trading strategy is to capture profits when we have them and cut any losses quickly.
Let’s take a look at CLF business description:
Cleveland-Cliff, (CLF) Cleveland-Cliffs, Inc. engages in the production and sale of iron ore pellets to integrated steel companies in North America and Australia. It provides iron ore pellets, including standard, fluxed, and high manganese, which are used in blast furnaces as part of the steel-making process. The company also engages in the management and operation of six North American iron ore mines located in Michigan, Minnesota, and eastern Canada. Cleveland-Cliffs was founded in 1847 and is headquartered in Cleveland, Ohio.
Our proprietary analysis shows that this stock has a current value of approximately $155 per share. Because the stock is currently trading for less than $100 it has the potential to stay on the best stock pick list for some time to come.
It has a forecast earnings growth rate of 33% a year and a forecasted EPS of almost $7 a share, both of which are excellent characteristics for a top stock.
Let’s take a look at the stock chart and see what the technical analysis can show us:
As you can see from the above stock chart of CLF, it broke out from a basing chart pattern in early April, coinciding with the recommendation to go long in this rally.
Since the breakout from that chart pattern it has mostly hugged the upper Bollinger band with the exception of a small pullback in early May. That pullback created another trading opportunity when the stock broke out of the chart pattern on huge volume.
Price and volume action of a stock is the most important component of technical analysis and it didn’t fail us here.
The Stochastics, MACD and RSI are looking a little over-sold but remember that these technical analysis indicators can be oversold for a longer time during bullish runs of hot stocks.
So should you be selling this stock pick now or hold on for more profit?
CLF may indeed have some more profit potential left but you may want to consider taking some profits off the table and protecting the remainder with a 5% trailing stop.
If you end up selling CLF, replace it with another stock from the best stock list, especially when you see breakouts to new highs on increasing volume.
As the author and owner of this article, you have my permission to publish these postings & articles electronically or on your own Web site, free of charge as long as the following by-line and functional Internet link is included in its entirety.
Written by Geoff Green, at http://profitable-investing.com Copyright 2008.
Topics: Bollinger bands, MACD, indicators, stock picks, technical analysis |
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