Do All Aluminum Companies Crumble Like Foil

Aluminum companies, or Aluminium for you on the other side of the pond, have had a tough go of it lately, crumbling like a wadded up ball of Aluminum Foil. So will this continue or is there a turn in sight. Three companies in the space, Alcoa (ticker: $AA), Reliance Steel and Aluminum, (ticker: $RS) and Noranda Aluminum Holdings (ticker: $NOR), are speaking loud and clear through their charts.

Alcoa, $AA

Alcoa, $AA, started falling in early April from a new 52 week high. It had a brief pause and rise through June until it fell again after releasing earning recently. Now it is testing support at 14.50, which has been an important level not only in June, but as resistance in December and March of 2010. As it probes the support the Relative Strength Index (RSI) is starting to level but the Moving Average Convergence Divergence (MACD) is still growing negative. It could go either way. If it falls under 14.50 look for a test of support lower at 14 followed by 13.50 and 12.90-13.0. If it holds then a break above 15 has resistance at 15.50, near the bearish 50/200 day Simple Moving Average (SMA) cross and then 16.50. The bias is to the downside now.

Reliance Steel & Aluminum, $RS

Reliance Steel & Aluminum, $RS, also had a bad spring with a reprieve in June and early July only to start falling again. Now it is testing support at 46.50 which was previous support in June and was also important in May and November 2010. The last two days have shown long shadows on the candles bringing hope for a bounce but it also has the RSI leveling with the MACD diverging lower. If it falls below 46.50 look for a run lower to test support at 45.20 followed by 43.70 and 42.70 lower. If it does turn higher above 48 then resistance comes first at 50 followed by 51 and 51.80. My bias and the trend are both lower.

Noranda Aluminum Holdings, $NOR

Noranda Aluminum Holdings, $NOR, has a very different look in its chart. 13.50 has been a very important level for it since February with a couple probes under that to 13 as well recently. But eh RSI has clearly turned higher and is rising while the MACD has crossed positive. Price action is also bullish moving off the lows in a couple of stair steps higher. It still has work to do to erase a consolidating trend. But a move above resistance at 15.0 and then 15.50 after that would help. Ultimately it needs to clear 16.50 and 17.50 to turn bullish longer term. But this Aluminum Company has definitely not been wadded up and thrown in the garbage.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog