Bullish DailyPlay – Cleveland-Cliffs (CLF) – January 26th, 2022

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The bullish DailyPlay for Wednesday, January 26th is Cleveland-Cliffs Inc (CLF). While CLF is currently on a bearish trend, our thesis for our bullish DailyPlay is that CLF will likely rebound higher from current levels. 

Technical View

• Price has pulled back to the 38% Fibonacci level (based on 2016 secular low to highest high). 
• Reversal in short-term momentum indicates price is reacting positively to the $16 support level.

Fundamental View

• CLF is well-positioned in Iron Ore Pellets and Steel segments in North America with acquisitions of AM USA and AKS likely to provide strong EPS and FCF growth. 
• In 2021, CLF was successful in improving their balance sheet by playing down debt
• Earnings: Feb 11, 2022 (16 days)

As this is a credit spread, look to take profits at 50% and cut losses at 100%:

• Take Profit: $0.35 Debit
• Stop Loss: $1.42 Debit