AA (NYSE) Alcoa Inc. is prolonged downtrend, with a prerequisite for continued because of falling aluminum prices on commodities and general problems in demand, plus Chinese shocks. Brief correction in the last 10 days and repulsion of the diagonal resistance coinciding with the level of EMA50 offers a promising opportunity for Short.
Bank of America Merrill Lynch is not yet ready to call a bottom in aluminum prices, but the firm is starting to see a turn that could lead shares of Alcoa higher. According to Tanners, who uses Michael Widmer's aluminum price forecast as a baseline, Alcoa has an "established track record" for addressing low aluminum prices "quickly." Tanners said that the firm typically cuts costs, curtails production, or permanently shuts capacity when prices fall. That response means that "over time aluminum prices should become less relevant" for Alcoa.
The investors have subsequently penalized Alcoa unfairly for aluminum's weakness, particularly in the wake of its purchase of RTI and Firth Rixson, two acquisitions that benefit from "structurally strong aerospace demand." With these acquisitions, the company reduced "its earnings sensitivity to aluminum the commodity." The stock is more than 20 percent undervalued based on BofA Merrill's target price.
Currently, the price is $ 9.57 at 52W Range: $ 7.97 - $ 17.62; Week volatility = 3,85% and Beta = 1.43
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.