On Tuesday, shares of Cleveland-Cliffs Inc (Ticker: CLF) entered oversold territory, trading as low as $7.85 per share. We identify oversold conditions using the Relative Strength Index (RSI), a technical analysis tool that measures momentum on a scale from 0 to 100. A stock is deemed oversold when its RSI drops below 30.
Cleveland-Cliffs Inc’s RSI currently stands at 29.3. In comparison, the average RSI for metals and mining stocks covered by Metals Channel is 46.5. Meanwhile, Spot Gold has an RSI of 9.6, and Spot Silver’s RSI is 13.1.
For bullish investors, CLF’s RSI of 29.3 may indicate that the recent intense selling pressure is waning, presenting potential buying opportunities.
Examining a one-year performance chart (below), CLF’s lowest price in the past 52 weeks was $7.85 per share, while the highest was $22.97. The last trade recorded was at $8.04, reflecting a drop of approximately 2.2% for the day.
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The opinions expressed here are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
On Tuesday, shares of Cleveland-Cliffs Inc (CLF) fell into what is classified as oversold territory, trading as low as $7.85 per share. The concept of “oversold” is determined using the Relative Strength Index (RSI), a technical analysis tool that measures momentum on a scale from 0 to 100. A stock is deemed oversold when its RSI drops below 30, signaling that it may be undervalued due to excessive selling.
For Cleveland-Cliffs, the RSI registered at 29.3, signifying that the stock is indeed considered oversold. In contrast, the broader metals and mining sector, as analyzed by Metals Channel, has an average RSI of 46.5, indicating healthier trading momentum compared to CLF. Moreover, indices for precious metals show even lower RSIs, with Spot Gold at 9.6 and Spot Silver at 13.1, further illustrating CLF’s relatively weak position within its sector.
Investors with a bullish outlook might interpret CLF’s low RSI reading as an opportunity, suggesting that the recent heavy selling pressure could be nearing its end. This situation presents a potential entry point for buyers who believe the stock may soon rebound.
The stock’s performance over the past year shows that CLF reached a low of $7.85, its current trading price around $8.04, contrasting sharply with its 52-week high of $22.97. On the day of the report, shares of Cleveland-Cliffs were down approximately 2.2%, which further reflects the prevailing market sentiment regarding the stock.
Overall, while the current market conditions appear challenging for Cleveland-Cliffs, the oversold status indicated by the RSI may entice investors looking for bargain opportunities amid a backdrop of recent declines. As such, monitoring additional investing cues and the performance of CLF could be worthwhile for those considering entering this sector at a lower price point.
