Editor's Note:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:

(bullish ideas) PXD, DVA, TUP, DRQ, CB, WTW, PVH, NDSN


Cliffs Natural Res. - CLF - close: 35.88 change: -0.92

Stop Loss: 36.55
Target(s): 30.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 13th
New Positions: Yes, see below

Company Description

Why We Like It:
There are plenty of opinions on CLF. There have been recent concerns that iron ore pricing is nearing a top and poised to reverse lower, which would be bad news for CLF. Other analysts believe CLF is near a bottom and investors should buy it for the almost 7% dividend yield. Technically the stock seems to be in a long-term decline. Shares have been underperforming since its January 2nd peak at resistance near $40.00. Now CLF is poised to breakdown under potential support at $35.00.

I am suggesting a trigger to buy puts if CLF hits $34.90. If triggered our target is $30.50 since the $30.00 level could be support. We do not want to hold over the mid February earnings report.

Trigger @ 34.90

- Suggested Positions -

buy the Feb $35 PUT (CLF1316n35) current ask $1.80

Annotated Chart:

Entry on January -- at $---.--
Average Daily Volume = 7.7 million
Listed on January 15, 2012