Alcoa Inc., #AA [NYSE]
Industrial products, Aluminum, USA

Financial performance of the company:

Index – S&P 500
Beta – 1.14
Capitalization – 10.35 B
Return on asset: -0.50%;
Income: -121.00 М;
Average volume – 34.20 М;
P/E: -;
ATR – 0.50.


Analytical review:

  • The company ranks 64th in capitalization in the sector of “Industrial goods” among the issuers trading in the US stock market.
  • Over 2015 the price of the company’s shares fell by 50% (from 16.00 USD to 7.00 USD). The main reason of the decline is the decrease in demand for aluminum and commodity market decline.
  • On 11 January the company reported for the fiscal year of 2015. Company’s losses exceeded 120 million USD due the crisis in the industry and economic problems in China, which is a strategic partner of the company.
  • Throughout 2015 the company has suspended and shut down much of the production capacity. Management of the company is planning to close the plant in Warrick in the near future. This plant produces the largest quantity of aluminum in the USA (over 260000 tons per year).
  • Fall of the world prices of aluminum continues to have a negative impact in the world market. In the stock exchange LME the price of aluminum fell by 19% in 2015.
  • The company won a tender and signed a contract with General Electric for 1.5 billion USD. The Corporation will supply the production parts for the aircraft engines.

Summary:

  • Presently, production of aluminum in the USA is not a profitable business. The fiscal year of 2015 company’s business was unprofitable. The decrease in demand for aluminum has negative impact on the financial situation of the company. Partnership with General Electric can hardly cover losses of the company.
  • In the near future, company’s shares are likely to decline.

Trading tips for CFD of the company Alcoa Inc.

Long-term trading:
currently, the issuer is traded at the resistance level of 8.10 USD. After testing and in case of maintenance of this level and respective confirmation (for example, pattern Price Action), we recommend to open short positions. Risk per trade is less than 2.5% of capital. Stop order can be placed at the level of 8.85 USD. We recommend multi-trade for this position. Take profit shall be placed at the levels of 6.70 USD, 5.80 USD and 5.00 USD.


Analytical review of Alcoa Inc.

Short-term trading: over the last three sessions local support and resistance levels of 7.80 – 8.40 USD have been formed. After breakdown and testing support level of 7.80 USD it is advisable to open short positions. Risk per trade is less than 2% of capital. Stop order can be placed slightly above the signal line. We recommend multi-trade for this position. Take profit can be placed at the levels of 7.50 USD, 6.90 USD ND 6.50 USD.


Analytical review of Alcoa Inc.




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