After a nice uptrend, Vale has stalled and formed a Head and Shoulders
pattern. Notice the volume
on the uptrend to the "head", increasing right? But notice after the stock hit support for the second time (after forming the head) the second shoulder move up is rather mixed. Volume
tells us a little bit more on moves up rather than moves down. You don't need increasing volume
for a move down, it's nice and supports the argument, but it's not necessary.
Wait to buy until the stock moves below the blue support line with decent volume
but more importantly ending the day near or at its daily low (shaven bottom). Stocks like to consolidate for a few days before moving down on patterns like this, so i would wait to see if the stock remains around the same price but Stoch
indicators move higher.
Next major support is at the $8.00 mark (38.2% retrace), with a drop
through that finding support at $7.50 then just below $7.00.