Alcoa’s volatility is worth watching

In 30 trading trading days since September 30, 2022…..

Alcoa shares have seen 23 trading days where the price moved up or down more than 2%.

Furthermore, 16 of the last 30 trading days saw the stock close higher or lower by more than 4%.

Although this prolific rate of change has existed for months prior.

Surely, nothing too exciting can happen about the fortunes of an aluminium producer which warrants such volatility?

Has Alcoa got the makings of becoming a ‘meme’ stock?

November 11, 2022

by Rob Zdravevski

Aluminium Correlations

Here is the price of Aluminium and Alcoa’s (AA.N) stock price waltzing around.

Observe the operational leverage the equity can provide if the company is executing well, when the underlying commodity is in an upward trend.

September 2, 2022

by Rob Zdravevski

Alcoa wipes 50% quickly

Only 20 days ago, I wrote this note reiterating my mean reversion theme and I chose the Alcoa stock price as only one example.

I didn’t expect the $55 price target to be seen so soon.

Alcoa has now retraced 50% of the (somewhat parabolic) advance since October 2020.

Investing (in general) involves probability and mathematics.

In conjunction with my other indicators, today I’ll assign a certain probability that Alcoa’s stock price visits the next stop of $44.

In the meantime, the current risk, valuation, sentiment and pricing prompts me to accumulate some Alcoa around this $54-$55 mark.

May 10, 2022

by Rob Zdravevski

Don’t buy at the wrong time

This chart below (and commentary) shows you when you should be buying Aluminium or associated proxies (such as Alcoa) and the power of operational leverage that a corporation can provide shareholders.

The blue line is the rolling 200 week moving average.

Gravity does exist.

While the theme of “having industrial capacity in moments of output gaps” remains intact, at this moment, it is a sellers market.

Beware of chasing the bullish (metals and energy) commodity prices higher.

It’s also the start of an odd period where higher prices of finished goods (due to the higher price paid by buyers of raw/base/industrial commodities) may be left on the shelf.

Rising prices have been evident but we can’t assume that higher prices are automatically paid for.

February 18, 2022

by Rob Zdravevski

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