Alcoa Inc - AA - close: 17.21 change: -0.08

Stop Loss: 15.75
Target(s): 18.50, 19.75
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
If you listen to financial media it seems that 2011 will be the year of rising commodity prices and inflation. A lot of commodities, with gold being an exception, are surging higher. Copper is hitting record high prices, which could drive more business toward aluminum makers like AA as manufacturers look for alternatives. This past week saw AA breakout from a three-week consolidation. I am suggesting we launch bullish positions on a dip.

Use a trigger at $16.65. If triggered we'll start with a stop at $15.75. Our upside targets are $18.50 and $19.90. The early 2010 high near $17.60 will probably be short-term resistance but the trend for AA looks pretty healthy.

Trigger @ 16.65

Suggested Position: Buy AA stock @ 16.65

- or -

Buy the March $17.00 calls (AA1119C17) current ask $0.84

Annotated chart:

Entry on February xx at $xx.xx
Earnings Date 04/11/11 (unconfirmed)
Average Daily Volume: 41 million
Listed on February 2nd, 2010