Vale (VALE) has made a quiet bottom formation and further gains are anticipated. The daily chart for the ADRs shows a breakout from a possible ascending triangle formation. A strongly rising On-Balance-Volume (OBV) line suggests that we could be surprised on the upside.
In this daily chart of VALE, below, we can see an eight-month triangle formation. VALE makes higher lows at $3.50 and then at $4.00 and $5.00 while on the upside the same high holds around $6.10. Prices finally broke out over $6.10 this month. The height of this triangle pattern added to the breakout point gives us a price target in the $8.50/$8.75 area.
With prices above the rising 50-day and the rising 200-day moving averages corrections are probably going to be sideways instead of down. Notice the strongly rising OBV line that matches and confirms the price strength.
In the bottom panel, above, is the Moving Average Convergence Divergence (MACD) oscillator, which crossed the zero line earlier this month for a buy signal.
If the daily chart did not convince you that VALE had bottomed, this weekly chart, above, should do the trick. VALE is above the rising 40-week moving average line. The weekly OBV line is rising and the MACD oscillator just crossed to a fresh buy signal.
On this chart $9 looks like a reasonable price target.