Vale Plunges 4.74% on Heaviest Volume in Two Months Amid Technical Breakdown

Vale (VALE) declined by 4.74% in the latest session, closing at $9.355 after trading between $9.335 and $9.77. This drop occurred on elevated volume of 92.3 million shares, marking the highest daily volume in over two months. The technical context for this move is analyzed below through multiple frameworks.
Candlestick Theory
Recent sessions show a bearish engulfing pattern: The 3.81% green candle on June 16 (high: $9.855, close: $9.82) was entirely engulfed by the subsequent 4.74% red candle on June 17. This indicates strong selling pressure near the $9.80–$9.85 resistance zone, which has capped multiple rallies since May. Support now rests at the June 17 low of $9.335, with more significant structural support near $9.00–$9.10 (April–May lows).
Moving Average Theory
Vale trades below all key moving averages, with the 50-day (approx. $9.65), 100-day (approx. $9.85), and 200-day (approx. $10.10) sloping downward—confirming a bearish long-term trend. The June 16 rally failed precisely at the 100-day MA resistance, while the 50-day MA has consistently limited upside attempts since late May. This alignment of declining averages signals sustained distribution.
MACD & KDJ Indicators
The MACD (12,26,9) remains in negative territory with a bearish histogram expansion on June 17. Concurrently, KDJ (9,3,3) shows the %K line (25) crossing below %D (30) from oversold territory—a "failure swing" signal implying downward momentum continuation. Both oscillators align in suggesting no imminent reversal despite short-term oversold conditions.
Bollinger Bands
June 17’s sell-off pressed prices against the lower Bollinger Band (20-day, 2σ) at $9.34, triggering a moderate band expansion (bandwidth increase of 15% versus prior sessions). This volatility breakout favors continuation of the downtrend. Resistance now aligns with the middle band (20-day MA) near $9.60, which rejected prices on June 11-12.
Volume-Price Relationship
The bearish engulfing candle on June 17 occurred on 98% above-average volume (92.3M vs. 30-day avg: 46.7M), validating the breakdown. Conversely, the June 16 rally saw only moderately elevated volume (+23% vs avg), highlighting weak bullish conviction. Distribution dominates accumulation, with higher-volume down days consistently exceeding up-day volume intensity since May.
Relative Strength Index (RSI)
The 14-day RSI (36) hovers near oversold territory but shows no bullish divergence; both price and RSI made lower lows on June 17. While approaching the oversold threshold (<30), the lack of divergence suggests vulnerability to further downside. Historically, VALE’s RSI has remained below 50 for 7 consecutive weeks, underscoring persistent bearish momentum.
Fibonacci Retracement
Using the March swing high of $11.21 and April trough of $8.055, critical retracement levels are $9.57 (38.2%), $10.05 (61.8%), and $10.53 (78.6%). The 38.2% level ($9.57) has capped recovery attempts since late May, most recently on June 16. The breakdown below $9.50 opens the path toward the 23.6% retracement ($8.99), with the April low of $8.055 as the next major bearish target.
Confluence and Probabilities
Multiple confluent signals heighten bearish probabilities: (1) Volume-confirmed breakdown below $9.50 aligns with Fibonacci resistance and the death cross (50<100<200 MA), (2) MACD/KDJ synchronization shows no reversal momentum, and (3) Bollinger Band expansion supports downside continuation. The sole counter-signal—RSI approaching oversold—lacks confirmation from other oscillators or price action. Should $9.335 fail, a retest of $9.00 support becomes likely (probability: 70%).