Captain's leveraged play of the week. [VALE]

Here's the thesis: Aussies know metals and Money Morning is run by Aussies.  When Jim Cramer talks, I laugh, nay, I mock the fool.  But this is not arrogance on my part but rather years of experience watching who knows what they are talking about and who doesn't.  That's why when Money Morning talks, I pay attention.  When they say things that match my EW models and which are off of most people's RADAR, I doubly listen.  You can read Jason Stevenson's (Money Morning writer) article here.

More important to me than his article with "fundamentals", however, is the chart of a nicely volatile Nickel play, Ticker: VALE.  As usual in these cases, I know dick about this company, never heard of it before, don't know its fundamentals (and neither does anyone else IMO).  When I got the email from Money Morning I simply looked up pure play nickel and VALE is one of the things that showed up.

While I do not know anything about this company more than its chart, I do know that it has been swinging between these two rails except on this 5th bounce when it threw under, broke back up into the channel and then and then fell back to kiss from above.  What can I say, I'm a sucker for the breakdown, breakout, kiss goodbye setup.  As long as this stays in the channel I think it is a good bet to take off from here.

But this chart also has an added perk: volume markers right where they should be for bottom indications.  You saw what happened last time the volume spiked like this in mid 2008.  Then look at the mini volume spike coincident with the share price collapse 2010 which foretold another nice rally.  Well this dude has been falling ever since 2011 (you know, the same time gold and silver began to stumble...) and now it has thrown under on high volume.

The safe play is of course to buy the shares and just hold. But  I think a little leverage can go a long way here.  Look at the last prices below.  Everyone is anticipating massive commodity price deflation.



Now I don't know what gold and silver are going to do be cause they are not really commodities but if you look at my most recent model chart update on copper miners and then compare it to actual below, you will see that COPX has clearly broken up into the channel and is looking to assault the top rail soon.  That whole thing began downward in 2011 as well.



Perhaps the powers that be want to hold gold and silver down a bit longer for all I know but I don't think they give two craps about nickel.

Anyway, I like VALE at current prices of $6.71 as of today.  For normal stock buying, I would be a buyer here with 5% trailing stops.  I think I'll start building a position in the Jan 2017 $15 calls.