How is it going Bros’ nation? Welcome back to another episode. Today I want to chat for a bit about CLF, Cleveland Cliffs Inc. I stumbled across this stock today and I saw something promising, and I thought I would share. Before getting into it though, hit that like, share, and subscribe so new folks can be introduced to what we are doing here at Bros nation. I took a little family vacay, but I am back, and I have some extra free time on my hands due to quarantine so…. Market watching and playing is my focus until this quarantine is over. FYI I am covid negative for those that are wondering.   

Support: https://linktr.ee/moneytalksundayz 

Anyway, on to CLF.  

It is currently ranked a strong buy on Tip Ranks with a prospective price target of 29.62 at the mid-range. On the high end its priced at $39 and $24 on the low end. Currently it is trading at 19.10. This morning  the stock saw “unusual options activity” according to Benzinga. Now unusual options activity can be triggered by one of three things: 1. Exceptionally large trading volume which refers to the number of contracts traded over a given amount of time. 2. The trading of a contract with an expiration date in the distant future also marks unusual activity. Generally speaking, when it comes to options the farther out the expiration date of the contract, the higher the potential for  it to reach the strike price and grow its time value. Time value in this respect is important because it represents the difference between the strike price and the value of the underlying asset. And finally, 3. Out of the money contracts are considered unusual because the contracts are purchased with a strike price that is far from the underlying asset price. Buyers and sellers attempt to take advantage of a large profit margin in these cases because they are banking on the value of the underlying asset to change dramatically in the future.

With these signatures coming into play, one would be hard pressed not to at least add this stock to their watch list. Its next earnings report date is this Thursday the 22nd. If I were to run an option play, I would probably play a call option and sell it right before close Wednesday afternoon.

Why?  

Wall Street expects a year-over-year increase in earnings on higher revenues when Cleveland-Cliffs (CLF) reports results for the quarter ended June 2021. While this widely known consensus, outlook is  important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.  The earnings report, which is expected to be released on July 22, 2021, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it is worth handicapping the probability of a positive EPS surprise. Considering that I just transferred funds to my Webull account this morning, those funds are not available for options trading I am playing the long swing trade and purchased a significant number of shares to hold until I reach my target price before selling. CLF does not currently pay dividends, so I will not need to buy and hold this stock so once my swing trade is over, its on to the next play. One thing I am trying to do is clear the clutter that I have made with all the different stocks that I have plays in now. I am holding on to all my dividend paying stocks but for all the others, once I have made my profit, I am dumping them until another play presents itself.