Alcoa Inc (NYSE:AA) – Facing immediate resistance in $13.70-$14.00

Alcoa Inc (NYSE:AA), the world’s biggest aluminum company, has reported its first quarterly result beating the market expectations but the revenues may have disappointed the market. The stock has seen 5 consecutive sessions of gains but the afterhours suggests that the stock may open with a gap down today. The stock lost 3.22% on heavy volume in the after hour’s market.

Does this analyst foresee a long-term upside in AA?

This first quarter is expected to be weak for many companies as lower oil prices and a stronger US Dollar may have affected the profitability. In this background, Alcoa Inc (NYSE:AA) is trying to remodel itself to a supplier of the auto and aerospace industries and these segments may have helped it to boost the result a lot.

AA

The net income of Alcoa Inc (NYSE:AA) came at $195 million, a welcome change compared to the $178 million loss incurred a year back. The earnings per share, excluding restructuring costs, came in $0.28 against the expected $0.26. The only negative factor was the revenue, which at $5.82 billion was considerably lower than the consensus figure of $5.94 billion. According to the management, the revenue drop was mainly caused by the closing or selling a few smelting and mining businesses in various places but the future result of this loss-cutting measure is expected to be very beneficial for the company.

CEO Klaus Kleinfield claimed that the transformation process, from an aluminum producer to hi-tech auto & aerospace parts provider was working nicely following the corporate steps like acquiring jet engine maker company Firth Rixson.

Technically, the journey for the stock is difficult in all time frames. The short term chart shows an immediate resistance in $13.70-$14.00 levels which may push the price down for the next few sessions. The long term chart shows repeated rejection of price from the $17.50-$18.00 levels, a break above which is a definite requirement for major trend reversal.

About the Author

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.

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