Thursday, September 4, 2014

Thursday's Finalists: AA, ABX

The finalists from my analysis of Wednesday's markets are two materials companies, Alcoa Inc. (AA) of Pennsylvania and Barrick Gold Corp. USA (ABX) of Toronto.

(See "Thursday's Prospects" for the first round of analysis.)

Of the survivors from earlier rounds, three failed confirmation by moving back within their 20-day price channels: SPIL, BPL, and HELE.

Four had charts that were insufficiently bullish to support their bull signals: ALV, AMC, MDCO, and PZE.

Three bear signals have insufficient open interest on their options for use in building a bear position: ATRC, EFC, and EPE.

Two symbols are illiquid, even their shares: RWEOY and GLPEY.

One, INXN, is a bull signal with a bearish rating from Zacks Investment Research, the service I use to short-cut my fundamental analysis.

And two, much to my chagrin, are false positives caused by errors in the data I obtained from my vendor: EPZM and ANZBY. (It happens more often than you might think, and most of the time, I catch them early. Not today, however.)

That left the two, AA with a bull signal and ABX with a bear signal.

I called them both "materials companies" above, but that moniker hides huge differences. AA makes aluminum, with major application in a wide range of manufacturing.  BRK mines gold, with major application in adorning necks and fingers, and also in sitting in vaults.

Both are dynamic players in the global economy, but AA stands at the heart of manufacturing while ABX is mainly supplying the market for financial speculation.

AA stands out with a bullish rating from Zacks and the higher average volume.

ABX, rated neutral by Zacks, has a disability because it is a gold mining stock, a sector that I prefer to play with the exchange-traded fund GLD, which tracks spot price of the metal itself.

I shall post a full analysis of AA as a potential bull play prior to the closing bell.

-- Tim Bovee, Portland, Oregon, Sept. 4, 2014


My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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