A Chart Setup I Really Like

Today, I'm going to be sharing a chart setup I think has a lot of potential based on some of the technical studies I use here at MarketClub.

The chart I am analyzing is Cliff Natural Resources (NYSE:CLF).

At number 1, I have drawn a downtrend line from the high around $100, all the way down to where the trend line was broken in late July of 2013. Generally, the longer the trend line, the more powerful the move when it is breached. This trend line on CLF lasted a little over two years and touched three distinct points, confirming it as a valid trend line.

Learn more about trend lines here.

When the stock of CLF broke out at number 3, it also coincided with our monthly Trade Triangle turning green and giving a major buy signal on CLF at $23.75.

At number 4, it would appear that CLF has excellent support around the $20 area. I would not be surprised to see some further backing and filling and perhaps a pullback to the original buy point of $23.75. Should this occur, I would view this as an excellent opportunity to purchase the stock. As with any trade, I would use stops on this position to protect capital.

I have already drawn the Fibonacci retracement potential of this stock at number 5 on the chart. A 23.6% retracement would bring this stock back up to $35.63, while a 50% retracement would take CLF back to the $47.93 level. Should this occur, it would represent a potential 100% return on the original buy point at $23.75.

To recap, here is what I like about the chart setup on Cliff Natural Resources (NYSE:CLF):
• CLF has broken above a 2-year downtrend line.
• All of the necessary Trade Triangles are in place.
• Support appears to come in around the $20 area.
• Fibonacci retracements look very positive.

Keep in mind, there are always things that can go wrong with any trade. It is very important to have an exit plan and a stop loss strategy to protect your capital.

What do you think of this chart setup on CLF? Do you agree or disagree with my chart analysis? I would like to hear your feedback on CLF or any other stock that you're looking at.

Every success in your trading.

Cheers,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

20 thoughts on “A Chart Setup I Really Like

  1. My analysis
    In my opinion this wsa earlier corrective wvae of FLAT till NO 2, then became bearish impulsive wave of 1,2,3 . Then it could cross trend line as a corrective wave, seems to be sub division of zigzag. That may because of sentiment. I feel an impulsive wave will follow and taht will take it to Fibo 38.2% level. But it will take time.
    I am very thankful for this oppurtunity, I am very much exited. I want many chnaces like this. Pl you check and give me feedback. I can definitely improve it.

  2. Local mtn workers hours have been increased (MI). US & China recovering steel stocks indicating potential pricing power. New mgmt with new contacts? As more of an antiquated invester vs trader I expect my patience to be rewarded soon.

  3. I like your analysis. Price must close above past resistance @ 23.6, and retested it. Then it should do the same with the 38.2%, before price heads up to the Fib 50%. Of course the Fundamentals would have a lot to say!

    1. Fabio,

      Thank you for your kind words. A close this week on Friday above 27.34 will represent the highest weekly close we have seen since February.

      I Appreciate your thoughtful input into our blog page.

      Cheers,

      Adam Hewison
      President, INO.com
      Co-Founder of MarketClub.com

  4. Hello Adam
    Could you look at Zero -ASX:XRO please?
    There is an interesting backstory. It has been referred to as the Google of accounting (accounting in the cloud) and in recent weeks the share price has risen at an incredibly fast rate from around a $1 to the current $31. It has jumped to the fourth biggest stock by value on the NZ exchange in a matter of a month. It also has recently had a very successful American investment fund raising in which several well know silicon Valley entrepreneurs have bought into it.

    The company, which has around 140,000 paying customers globally and is yet to turn a profit, is now valued at close to $1.5 billion.

    Now it is dual listed on the Ozzie and Kiwi exchanges and I hold the NZ shares, so I am wondering how relevant Market Club triangle signals from the Oz exchange are for the Kiwi listed shares, if at all (I have noticed a rough parallel). the company plans to list on the NYSE in the future. Be pleased to hear your thoughts Adam.

    1. GaZZA,

      That’s great information, thank you for sharing your intell with everyone.

      For my money I would take half your money off the table and put tight stops on half of what is remaining. The other part I would let ride and use the weekly Trade Triangles as a stop out point.

      Thanks for the question, I hope my answer worked for you.

      All the best,

      Adam Hewison
      President, INO.com
      Co-Founder of MarketClub.com

      1. Thanks Adam
        I have in fact taken some profits and bought some more..but my real question is about the dual (and soon to be triple listing). Market club does not cover the NZX but does cover the ASX. Can one draw any conclusions from the charting tools re: the Ozzie listing? In your experience, have you ever experienced a situation where the is a wide divergence in the trends of a stock that is dual listed? Are there any plans to include the NZX? I realise it a small market but it has been growing of late with many new listings...

  5. Been in FSLR since 35 added at 45.. expect 90 then 120...been in CLF since 20..sometimes the triangles seem late to the game but ok I may add more here to CLF..yes they are volatile but overall patterns for longer term are stellar...we need more of these Adam!!!!
    Please see ONVO new stock 3D med that just went to high and MO triangle indicated last week..your thoughts welcome!!!

    1. sarah,

      Thank you for your encouragement and kind words, much appreciated. Looks like FSLR has a Target Zone of $75 to $80. Good luck with that one, nice close today.

      I will take a look at ONVO as soon as I have some time.

      Thanks for your comment and point of view.

      Regards,

      Adam
      Adam Hewison
      President, INO.com
      Co-Founder of MarketClub.com

  6. Hi Adam,
    Thanks for all your work and guidance. You are a great mentor.
    I'm currently looking at First Solar FSLR. Looks like a nice setup to me, but I value your opinion.

    Thanks!

    1. raven,

      Thank you for your kind words and encouragement. I will do my best to get more posts like the one you reference up on the blog. I will take a look at FSLR as soon as I have some time.

      All the best,

      Adam Hewison
      President, INO.com
      Co-Founder of MarketClub.com

    1. wfayen,

      Thank you for sharing your thoughts with everyone. Sometimes the fundamentals are not well known to everyone but the insiders. Maybe things are changing fundamentally we just don't know it yet, certainly the price action is saying that a lot of people like this stock and want it to go higher.

      All the best,

      Adam Hewison
      President, INO.com
      Co-Founder of MarketClub.com

Comments are closed.