Simple Trading Stock Review — Alcoa (AA)

In the 1970’s Alcoa (AA) used this commercial to communicate how innovative it was. The tagline was “Alcoa can’t wait!”

As of its September 20, 2013 close AA was booted from the Dow Jones Industrial Average. It closed at $8.26 on that day. The stock proceeded to bottom at $7.82 on October 3, 2013.

Since then the company’s stock has nearly doubled closing at $15.97 on Friday (just shy of the $15.98 52 Week High it obtained on the same day). That’s not that exciting… it’s been making 52 Week Highs since $10.00.

AA D

What’s interesting is that AA had been a drag on the Dow Jones Industrial Average since its 2008 collapse. As other components found their footing and bounced, AA continued to drag along the lows until it’s unceremonious expulsion from the index.

AA W

I suppose Alcoa could wait after all…

That said, the company faces severe challenges on its upward trek in the near term. It has entered a Resistance Zone that consists of the area of congestion from 2011. The top of this zone is the April high of $18.47, so there is plenty of performance possible from here, but I suspect that we will stall if not reverse around that level.

The Trader’s Point

Price is king. It will lead you wherever you need to go. Taking your trades based solely on research, index moves and such is a losing proposition. Learn and employ simple price analysis techniques.  Your account(s) will be glad you did.

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