Brazilian mining stock Vale has lost about one-third of its value since the spring, but now it could be showing signs of a potential turnaround.
The first pattern on today’s chart is the falling trendline along the highs of April and June. VALE broke that resistance early this month and bounced above it last week.
Second, you have a low in mid-July, a lower low in early September and a higher low in late September. Together, those have produced a basing pattern.
Third, prices have managed to turn the 50-day simple moving average (SMA) higher. It initially proved resistance in August and September, but the most recent bounce occurred at the same line. Is intermediate-term direction changing?
Next, last week had a bullish inside candle on the weekly chart.
Fifth, the 8-day exponential moving average (EMA) is back above the 21-day EMA. (This chart includes our 2 MA Ratio custom script.)
Finally, VALE has a new catalyst after saying on Friday it may spin off its copper and nickel divisions into a new company. That would separate the faster-growing metals (with green-energy links) from slower-growing iron ore. Could that excitement boost interest in a company trading for less than 5 times earnings (with a 20 percent dividend yield)?
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
The first pattern on today’s chart is the falling trendline along the highs of April and June. VALE broke that resistance early this month and bounced above it last week.
Second, you have a low in mid-July, a lower low in early September and a higher low in late September. Together, those have produced a basing pattern.
Third, prices have managed to turn the 50-day simple moving average (SMA) higher. It initially proved resistance in August and September, but the most recent bounce occurred at the same line. Is intermediate-term direction changing?
Next, last week had a bullish inside candle on the weekly chart.
Fifth, the 8-day exponential moving average (EMA) is back above the 21-day EMA. (This chart includes our 2 MA Ratio custom script.)
Finally, VALE has a new catalyst after saying on Friday it may spin off its copper and nickel divisions into a new company. That would separate the faster-growing metals (with green-energy links) from slower-growing iron ore. Could that excitement boost interest in a company trading for less than 5 times earnings (with a 20 percent dividend yield)?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.