BZ Chart Of The Day: The Conversion Of Cleveland-Cliffs

In the financial markets, certain price levels are more important than others. After a brutal beatdown, shares of Cleveland-Cliffs Inc. CLF have reached one.

The $26 level was resistance for Cleveland-Cliffs. The stock rallied to it in August and again in November, and each time the sellers overpowered the buyers and pushed the price lower.

But then in March, this resistance was broken and shares made a big move higher. After this happened, many investors who sold at $26 now regret doing so. A number of them decide to buy their shares back, but only if they can get them for the same price they sold them at.

As a result, there’s a large number of buy orders being placed at a level that had been resistance. If there are enough of them, it will convert the level into support. This is shown in the chart below.

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Posted In: TechnicalsTrading Ideas