Alcoa Inc. - AA - close: 11.33 change: +0.27

Stop Loss: 10.80
Target(s): 12.95
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 11, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 39 million
New Positions: Yes, see below

Company Description

Why We Like It:
Alcoa Inc. is in the basic materials sector. The company's main product is aluminum. It's been a volatile year for shares of AA. The stock reported earnings back in early January and plunged -6% following its report. Yet after the initial sell-off AA shares surged in a multi-day rally to new two-year highs. Since peaking near $12.30 in January AA has already experienced a -10% correction (more if you count intraday moves). Once again it looks like investors are buying the dip.

AA shares have garnered some bullish analyst comments lately. Just today Barron's ran an article on AA discussing how Goldman Sachs is bullish on AA and is forecasting +30% upside in the next six months for the stock. Essentially Goldman expects AA to benefit from rising aluminum demand from the automobile and aerospace industries.

We like the bullish trend of higher lows. AA's rally today struggled with technical resistance at its simple 10-dma and 20-dma near $11.40. I am suggesting a trigger to launch bullish positions at $11.55. If triggered our multi-week target is $12.95.
FYI: The Point & Figure chart for AA is very bullish with a $20.00 target.

Trigger @ 11.55

Suggested Position: buy AA stock @ (trigger)

- (or for more adventurous traders, try this option) -

Buy the APR $12 call (AA1419D12) current ask $0.45

Annotated chart: