ALCOA Inc. (AA)

[ogbull]

Jid3294, I don't think AA is going down much further. The strong attraction at 9.27 has got to pull some new buyers. The problem, as I see it, is that a lot of shareholders are discussed; they been riding the stock down for 2-3 months and finally decided they can't take no more. Many funds, insurance companies, and other investment schemes have limits to how long they can hold a losing investment. There is also a lot shifting money around to buy something the fund might consider a better short term investment. In other words, there's maybe a hundred reason why there has been selling pressure, including the fact that would aluminum prices have been down.

On the opposite side of the coin, the strong selling has been countered with strong buying. That AA dropped in share price is a function of who was more desperate, the sellers to sell out or the buyers to buy in. The desperation curve changes the lower the price gets. The low price increases the desire by the buyers to load and reduced the desire by the sellers to sell.

I think we will see AA start a long climb back. But don't expect the price to rocket up because there are surely a lot shares just waiting on a little price increase to sell out. If I had any dry powder, I'd be loading the wagon as soon as pre-market opens. The reason is that AA did not drop at the close. Instead, it came up a little. This tells you that the buyers were a tiny bit more desperate than the sellers. The sign that the sellers are more desperate is when the stock price dives in the last 5 minutes of trading.

But you can't read a lot into the close because a rise in price is also a sign that shorts are clearing their position.

Also keep in mind that I'm trying desperately to make more sense out of a day's trading than most. The reason I post a lot is so I can read my own messages and then try to analyze price behavior as compared to my thinking at the time. It's a form of technical analysis but more on a minute by minute basis. Maybe I'm a fool, but I do have fun doing it.