Peep the setup we have here in $VALE:
Since mid August, this price level has served as underlying support as the stock has consolidated into a rectangle formation. These price patterns make for great short term trading opportunities as they are easy to manage with defined support and resistance zones.
We know that prices are doing one of two things: Discovering or Accepting. After a period of price discovery, Vale has consolidated recent gains and may look to make a move higher soon. We are looking for a resumption of the uptrend which began back in June.
We can use a number of triggers to alert us when it may be time to try a long position. One I rely heavily upon is that of an Optex Band Proprietary Indicator developed by Optuma and Mathew Verdouw, CMT, CFTe.
I have written previously about Optex Bands and Optex Trigger Trends but if you want to learn more see here: Optuma Optex Webinar
On the intraday time frame we have a confirmation of an Optex buy signal in $VALE:
The range inside of the rectangle formation is about $1.00, so a break of that range above would lead to a price target of about $11.50.
I am long of January calls at the 11th strike price.
OC