Monday, November 8, 2010

Trade Watch: AA

With Alcoa Incorporated having its third-quarter earnings report out of the way, and the Fed had been confirmed, determination to debase its reserve note into a suitable substitute for toilet paper, I am just waiting for the all clear on the chart.

Alcoa formed an impressive double bottom at $10 a share, with a touch in July, then another in August. It has since traveled at 45° to resistance at $14 a share. Notice how the stochastics are rolling over well into the overbought zone. If they do rollover and the stock pulls back I will look to buy a quarter position somewhere under $14. On the other hand, in a trend momentum indicators continually raise false flags. The reason is that the trend skews the data in that direction. So, don't be afraid to pick up a quarter position above $14 a share, with a stop at $12.50, it it should continue up. Don't guess, just look for the Alert.

No comments: