There are a few sectors that have been breaking investors' hearts for
some time. Natural gas and gold instantly come to mind. Coal miners
also fell into this category, but when nobody was looking, the sector
put in a nice four-month rally.
Cliffs Natural Resources (NYSE: CLF)
is an international iron ore and coal miner. While it has done well
since the middle of this year, its long-term chart is indeed painful to
look at. Peaking above $100 in early 2011, it began a long descent to a
low of $15.41 in July. Along the way, there were plenty of false upside
breakouts that created false hope and real losses.
But
right now, the chart shows a possible inverted head-and-shoulders
formation. Marked by two lows (the shoulders) on either side of a lower
low (the head), it suggests that the trend is in the process of turning
from down to up. Resistance, called the neckline, is found at the line
connecting the highs of the two shoulders.
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