ALCOA Inc. (AA)

[ogbull]

Yesterday's Sellers Were Desperate: I watched on level 3 as they stacked up near the last trade price. The buyers were there also in large numbers. But the sellers were trying to push in front of each other and get their shares sold. I even though that some large holders were being sold out (force sell) due to financial troubles. The eagerness of the sellers pushed the price down. I watched the buyers back down a little letting the seller come down to them.

Here's another point about AA:

Roughly 60% of AA's share price is tied to the price of aluminum. As aluminum drops, mining companies slow or stop producing aluminum. Its just like the oil service business, as crude drops so does the price of oil service companies. China is acting like OPEC, overproducing to lower prices. This has been going on with Aluminum since July 2011 when the metal was selling for $1.20 per lb. It's now down 46% to $0.69 per lb. Lots of mining companies have stop producing aluminum and more have cut back. It's like crude, CAPEX spending drops. When this happens, the supply of aluminum slowly drops and prices return back to normal. Here's a recent video in which a mining expert flatly states that he expects prices to move back to normal by the end of this year. If you believe this guy, then you got to jump into to AA right now! The stock will certainly be a 50% gainer by the end of the 2015!

The video is here: http://www.bloomberg.com/news/articles/2015-08-19/glencore-ceo-glasenberg-says-no-one-can-read-china-right-now?cmpid=yhoo