Monitoring Alcoa at around $7.70, it came to my attention that despite gaping up and looking for downside gains, it continued to be lifted into the close/open; Alcoa's reluctance to push any lower over a considerable time frame spanning at least 13 months, has instilled enough confidence/conviction in at least a temporary bottom being in place, and warrants a small long.
The trade is supported primarily by the completion of a , confirmed by a breach above the $8 handle last week. The meagre attempts at breaking through the 0.786 Fib. as well as the newly found buyers/short covering is enough reason to attempt a small technical long. The trade is further supported by the Federal Reserves reluctance to Taper this month. Whether you believe the taper is coming, or not, is truly irrelevant as you will find yourself sidelined out of excellent opportunities that present themselves.
The above being said, there are plenty of reasons for not buying into Alcoa , including whether you truly believe that the global economies are on a path of sustainable self-sufficient growth to support Aluminium prices into the coming months and years ahead.
Entry: $8.30 and below at Daily EMAs located in the 8.08/8.16 region.
Target 1: $11.75
Target 2: $13.00
Target 3: $14.30