Position trade with 50%+ upside potential

٢٥ نوفمبر ٢٠٢٤

Trading near 8-year lows (not considering COVID-19 drop) VALE seems way undervalued both from PE - PS ratio standpoint and also when comparing with its peers. The stock price has reacted three times in $9.75 - $9.80 level. The period of November-December is the starting point of price appreciation since 2021 (although each time the rise in price was not as great as in the previous year). There is a significant resistance at the $12 mark (a level that acts as a strong support also). The stock is in a downward channel, with lower highs since the summer of 2021, where the stock hit a 12-year high of $22.50 approximately. The stock drops steadily on low volume and that signifies an exhaustion in selling power. If buyers step in and the $12 resistance breaks, first target will be $13 and the next one will be near $16 which is my goal for that trade.

When analyzing the options market, volume and open interest, as well as the call vs put sentiment, show that bullish sentiment dominates with 72% (approximately) of trades reflecting optimism, mostly through calls targeting higher future prices.

Iron ore prices and demand (mainly from China) might pose a threat, but at these levels I cannot see the price sliding further.

١٤ فبراير

تم فتح الصفقة

The sell-of put some pressure on longs!! At the $8.4 level I was doubting that the stock will dip further, but that was what I also thought at $9. Currently the stock price is on the rise with great volumes. The earnings will be decisive factor about the future (mainly short term) of the stock. Iron ore spot price is closing in 1Y high. VALE stated that their production is at the highest level since 2018. Let's hope that some brilliant days lie ahead for VALE longs!!