Initially I thought $21.35-$21.50 was going to hold. I was wrong. Upon further research, news releases, unrelenting bearishness from nearly all quarters, I lightened up this morning. Better to lose a little than to see it continue to freefall.
I sense no catalyst or reason for these shares to trade north of $20 with any meaningful conviction. No buyout is imminent. I still maintain a small position and hope for the best, but my initial enthusiasm that we had reached bottom I think was premature.
It wouldn't surprise me to see CLF reach the teens in the very near future.
Rio Tinto is in the same boat with the low prices of iron ore.
John Wilson, senior portfolio manager at Sprott Asset Management, had this to say on BNN TV 'Market Call' program yesterday: "Fairly high cost producer of iron ore. What you want to know is the price of iron ore. There was a sharp selloff on iron ore last year, recovered somewhat and recently had a high of $150 on the view that China was rebounding. It has now are rolled over and is at about $130. It has to be at least $150 for this to make sense." Also 1 in 5 CLF shares available is being shorted. The high number being shorted can push up/short the SP.
The video is available on BNN.CA "Market Call : March, 2013 : March 19, 2013 : Part Three [03-19-13 1:50 PM]"
Killing in CLF's stock price is way over done. Iron ore price in Q-1 of 2013 is very high ..in the range of $135 to $160 and that should result in CLF's Q-1 earning absolutely fantastic and way beyond the estimates.