December 21, 2020, 10:28 pm EST
2020 Actual Trade: VALE +34% Profits
As mentioned in our 11/23 article “Stock Picks: Brazil Steel Giant: Vale S. A (VALE)”, this is one of the most amazing rallies for the metal or basic material industry. Many stocks made more than 30% between Thanksgiving and Christmas holidays, including 80 billion Brazil giant iron ore / steel maker Vale S.A (VALE). It was a combination of falling US dollar, rising demand, short supply and trade disputes (China vs Australia) to cause sharp gains for this basic material industry.
Although driving power behind it could be complex, it may be relatively straightforward to understand from a technical perspective as we demonstrated.
- Notice 4 month flat top broadening pattern for VALE from July to November
- Resistance line was set to 12
- VALE quickly ramped up from 11/02 to 11/09 as a reminder that something big was going to happen soon. So, it was the time to prepare and watch the pullback
- Shallow pullback 11/13 and 11/16 at 11.5 was a final reminder that VALE was ready to rally above 12
- Thus, 11/17 was the perfect timing when VALE crossed 12 line and we got in at 12.57
- VALE did excellent by running all the ways for the next month and finished with +34% without looking back.