CLF modified Head and Shoulders for NYSE:CLF by ITMmatty

CLF , despite a recent jump in HRC1! steel futures , continues to selloff.

It’s day candles reveal a 3-peak pattern commonly understood to be a “Head and Shoulders”.

Despite the modified (angled) neckline, I still read this pattern as incredibly bearish .

CLF is also quite close to invalidating a strong 1y trendline (pink) for the second time in the last quarter.

While I personally don’t have any interest in a short position for such a fundamentally strong stock, this pattern and support break presents enough concern to dissuade me from taking a long position until sometime in September.

My guess is other technical investors will feel the same!

CLF seems likely to stop selling off at the 21.60 level, which is both the 0.5 Fib zone, as well as the end of the neckline for the Head and Shoulders that have formed.

I will wait for strong reversal confirmation before taking a bullish positions. Any long positions should consider the impact of upcoming earnings 10/22, and look to take profits before then.

Fibonacci time zones call for a local top around Oct 14th, about a week prior to earnings , which aligns with historical price action.

MacD and RSI are both moderately bearish and congruent with the Head and Shoulders bear sentiment.

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