Today, meme stock mania is permeating even more nooks and crannies of the stock market. One recent — and intriguing — target of the retail investor crowd is Cleveland-Cliffs (NYSE:CLF) and CLF stock.
Indeed, it appears there are a number of catalysts in favor of Cleveland-Cliffs right now. As the largest flat-rolled steel producer in North America, CLF stock is a pure play on the cyclical recovery in commodities and economically sensitive materials. Accordingly, CLF stock is heavily leveraged to the post-pandemic recovery. And looking at the company’s stock chart, one can see that this momentum isn’t simply transitory. Indeed, CLF stock is trading near its 52-week high for a reason.
The company’s vertically integrated business model includes a range of activities like iron ore mining, steel production, and downstream finishing, stamping, tooling, and tubing production. Those bullish on North American economic prospects over the medium term have piled into this momentum play of late.
Additionally, the company announced today a ribbon-cutting event for its state-of-the-art Direct Reduction plant in Toledo, Ohio. The company’s focus appears to be on directing investor interest toward the company’s environmentally friendly, $1 billion investment in an ultra-modern production facility. Using natural gas, it’s attempting to make waves in reducing greenhouse emissions considerably. For ESG investors out there, this is great news.
However, the big catalyst that has taken this stock more than 11% higher at the time of writing is outsized retail investor interest. Let’s dive into whether CLF stock could indeed represent a squeeze play for eager retail traders today.
Can r/WallStreetBets Squeeze CLF Stock?
As mentioned, Cleveland-Cliffs already has a number of catalysts in its favor. However, retail investors have increasingly looked at CLF stock as a potential short squeeze.
Some intriguing due diligence has been posted on the typical social media forums including Reddit. A similar theme has emerged. Investors seem to like the idea of “boiling short-sellers like frogs,” a quote retail investors have pulled from an old 2019 article on the company. That was a long time ago. And CLF stock was trading in a much different pattern than today.
However, that sort of sentiment is enough to get retail investors on board. This is a company with a short volume ratio around 17%. Accordingly, it’s high enough for investors to take a look at the possible squeeze outcomes with this stock.
Today’s spike has occurred on more than double the average daily volume thus far. Accordingly, it’s clear heavy retail buying is at play with this stock today. For those looking to trade momentum, this is a highly volatile stock to watch right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
