Vale has pulled back following a sharp rally, creating a potential opportunity for global-economy bulls.
The Brazilian metals company ripped more than 80 percent between late-October and early January. Its $19 peak on January 4 was the highest price in almost eight years. VALE then retreated toward $16, and is now bouncing at its 50-day simple moving average (SMA).
Its recent low of $16.09 was also very close its October 2018 high of $16.13. Has old resistance become new support?
Third, stochastics showed a deeply oversold condition in late January, from which VALE is now recovering.
VALE is one of the most liquid names in the relatively obscure materials space. Along with
FCX
, it is one of only two metal companies to average at least 100,000 options contracts in the last month.
Overall, this is as much of a macro idea based on the global economy. Covid cases and the U.S. dollar are falling while cyclical sectors like energy and financials are outperforming. Traders who believe these sector trends foreshadow a recovery may consider VALE's pullback an opportunity.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
The Brazilian metals company ripped more than 80 percent between late-October and early January. Its $19 peak on January 4 was the highest price in almost eight years. VALE then retreated toward $16, and is now bouncing at its 50-day simple moving average (SMA).
Its recent low of $16.09 was also very close its October 2018 high of $16.13. Has old resistance become new support?
Third, stochastics showed a deeply oversold condition in late January, from which VALE is now recovering.
VALE is one of the most liquid names in the relatively obscure materials space. Along with
FCX
, it is one of only two metal companies to average at least 100,000 options contracts in the last month. Overall, this is as much of a macro idea based on the global economy. Covid cases and the U.S. dollar are falling while cyclical sectors like energy and financials are outperforming. Traders who believe these sector trends foreshadow a recovery may consider VALE's pullback an opportunity.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
