After a long, meandering downtrend that began in early 2012, Alcoa seems to be breaking out. Moneyflow is positive, the 50 and 200 day MA’s were broken to the upside (50 day is pointing up), and momentum indicators are flat to oversold. Volume supports the breakout thus far. Aluminum stocks on the rise are one of the signs of an improving economy (theoretically), so the potentially positive chart profile may be pointing to further progress in the U.S. – China’s growth won’t hurt this kind of stock either.
The fundamental analysts haven’t caught on to this stock yet. Its covered by 20 analysts, 17 of which assign a hold or sell rating. Perhaps if the stock shows further signs of the recent breakout continuing, you will see upgrades. The current resistance at $9.50 – $10 would be important to break. This is one of those cases where the technical and fundamentals are not necessarily on the same page. Keep an eye on this one–it could get interesting. Disclosure: we do not hold this stock, and do not intend to buy it at this time.
Upcoming speaking events with Keith Richards
CSTA Toronto Chapter Meeting: Wednesday November 27th, 4:30pm – 6:00pm. Everyone welcome to this presentation on “The Great Rotation” by Keith Richards. Strathacona Hotel, 60 York St. Toronto. Contact [email protected] for more information.
Orangeville Public Library: Tuesday December 3rd, 1:00pm – 2:00pm. Everyone welcome to this presentation surrounding Keith’s latest book, Sideways: Using the power of technical analysis to profit in uncertain times