Vale Stock Drops 8% In A Week – Here’s Why

by Trefis Team
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Vale stock (NYSE: VALE) is down more than 8% in just the last one week, underperforming the S&P 500 which was up 1.6%. If you look at the change over the last ten days and one month, the stock has dropped 7.2% and 8.8%, respectively, thus having lagged the broader market on both occasions. The drop in Vale stock was after the company announced a lackluster Q3 2021. Though there was a 3.2% rise in iron ore sales for Q3 2021, nickel and copper sales fell sharply. Additionally, Vale also said iron ore production in 2021 could be at the lower end of its guidance range of 315 million to 335 million tons. Moreover, China made a U-turn on its mining curbs and rushed to boost domestic supplies to bring down commodity prices. For this, the Chinese government resorted to various measures, including auctioning larger amounts of aluminum, zinc, copper, etc. from its national reserves. The iron ore price is already down more than 40% in the last three months.

Now, is VALE stock set to drop further or could we expect some recovery? We believe that there is a 47% chance of a rise in VALE stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on VALE Stock Chance of Rise. For additional details about Vale’s business, see our analysis on Vale Revenues.

Twenty-One Day: VALE -8.8%, vs. S&P500 2.2%; Underperformed market

(21% likelihood event; 47% probability of rise over next 21 days)

  • VALE stock decreased 8.8% the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 2.2%
  • A change of -8.8% or more over twenty-one trading days is a 21% likelihood event, which has occurred 539 times out of 2516 in the last 10 years
  • Of these 539 instances, the stock has seen a positive movement over the next twenty-one trading days on 253 occasions
  • This points to a 47% probability for the stock rising over the next twenty-one trading days

Ten Day: VALE -7.2%, vs. S&P500 3.5%; Underperformed market

(19% likelihood event; 49% probability of rise over next 10 days)

  • VALE stock decreased 7.2% over the last ten trading days (two weeks), compared to broader market (S&P500) rise of 3.5%
  • A change of -7.2% or more over ten trading days is a 19% likelihood event, which has occurred 487 times out of 2516 in the last 10 years
  • Of these 487 instances, the stock has seen a positive movement over the next ten trading days on 241 occasions
  • This points to a 49% probability for the stock rising over the next ten trading days

Five Day: VALE -8.5%, vs. S&P500 1.6%; Underperformed market

(6% likelihood event; 53% probability of rise over next five days)

  • VALE stock decreased 8.5% over a five-day trading period ending 10/22/2021, compared to the broader market (S&P500) marginal rise of 1.6%
  • A change of -8.5% or more over five trading days (one week) is a 6% likelihood event, which has occurred 154 times out of 2516 in the last ten years
  • Of these 154 instances, the stock has seen a positive movement over the next five trading days on 81 occasions
  • This points to a 53% probability for the stock rising over the next five trading days

 

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