Vale: Stock mining with long-term promise

Val SA (VALUE) is a mining company for nickel and other important metals and minerals based in Brazil (iron ore and pellets, nickel, manganese ore, copper, iron alloys, metallurgical and thermal coal, copper and cobalt). As many of today’s market watchers continue to talk about the decline in demand and weak commodity prices, I’ve learned over the years to look beyond current distractions and focus on longer-term trends. .

Take a look at some VALE charts.

In this daily bar chart of VALE, below, I see a disc bottom. Stocks bottomed out in June and volume rose from September lows – a textbook example.

Investors in the early bottom are the expected buyers but in the second half of a bottom, the buyers are more active as they see the underlying story unfolding. VALE is trading above the 50-day and 200-day moving averages. The slope of the 50-day line is positive, but the 200-day moving average has more work to do.

The On-Balance-Volume (OBV) line shows a bounce from the September/October lows. The rising OBV line tells me that VALE buyers are more aggressive than sellers with higher volume on days when the stock is trading. close higher. Oscillator indicator Moving Average Convergence Divergence (MACD) is positive.

In the VALE weekly Japanese candlestick chart, below, I see a large triangle pattern. Over the past two years, VALE has made both higher lows and lower highs. Trading volume has increased since mid-2021.

The weekly OBV line makes a low in November 2021 and a higher low in September 2022. Price is trading above the 40-week moving average but its slope remains negative. Strength above $19 looks likely to break the downtrend from $23 in early 2021.

In this VALE Daily Point and Figure chart, below, I see that the software is predicting the $21 area as a potential price target. Trading at $21 will be a new high for the uptrend and will renew the uptrend.

In this weekly VALE Score and Figure chart, below, I used a five-box inversion filter. Here the software targets the $35 area. A good price target with a big dividend. A trade at $22 is a major bullish breakout.

Final strategy: I have a long-term vision that the world will be in short supply for the next few years. These scarce supplies will be delivered by sharply higher prices. I predict that VALE will benefit from these higher prices. Traders can buy VALE at current levels with a risk of $13. The $35-$40 area is my long term target right now.

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