Cleveland-Cliffs Stock Climbs on Fresh 'Buy' Rating

CLF stock is up 33% from its late-March lows

Jun 6, 2018 at 10:09 AM
facebook twitter linkedin


Citigroup initiated coverage on Cleveland-Cliffs Inc (NYSE:CLF) with a "buy" rating and an $11 price target -- representing expected upside of almost 33% to last night's close, and a move into territory not seen since March 2017. In reaction, CLF stock is trading up 2.9% out of the gate at $8.53.

The mining shares have been rallying hard since their late-March lows near $6.40, up more than 33%, and guided higher by its 20-day moving average. In early May, the shares gapped above former resistance in the $8 region, and are now boasting an 18.3% year-to-date gain.

Plenty of options traders are betting on the $8 region -- which contained CLF rally attempts in February, March, and April. Specifically, the July 8 put has seen the biggest increase in open interest over the past two weeks, with almost 15,500 contracts added -- and data from the major options exchanges confirms significant sell-to-open activity here.

Elsewhere on Wall Street, though, there's plenty of skepticism priced into the outperforming shares. Even though short interest declined 11% in the most recent reporting period, there are still 36.65 million CLF shares dedicated to these bearish bets -- representing a healthy 12.5% of the stock's available float, or four days' worth of pent-up buying demand, at the average pace of trading.

Plus, half of the analysts covering CLF stock maintain a lukewarm "hold" rating, while the average 12-month price target of $9.44 is an 11% premium to current trading levels. Should Cleveland-Cliffs continue to climb up the charts, an extended round of short-covering and/or bullish analyst attention could create even bigger tailwinds.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners