Alcoa Inc Analysts’ projection
BUY recommendation:
JPMorgan $25 Dec 11
Morgan Stanley $22 Dec 21
Barclays $22 Dec 21
Goldman Sachs $19 Jan 8 (NEUTRAL recommendation)
BMO Feb Market Perform
UBS Feb 2
CITI $17 Feb 2
Deutsche Bank Feb 8
The reason for the strong support lately could be due to the latest 3 banks scooping up shares for their clients below $14. The breakout will send us towards $15.3 first target, and $18 next target.
There is obvious accumulation going on as seen by the rising triangle with thinning volume as the triangle is squeezed. This is a very bullish scenario. Furthermore, the candles are all supported by the 20 SMA. Another bullish sign.
Notice the 4 long green candles in the triangle, those are sure signs of institutional buyers scooping up shares. The latest scoop was at $13.20 and $13.5
This is going to break out in by next week. We should be able to see $14.80 next week. My target is $15.30. And if the DOW rallies to 10800, then my target is $18.
Alcoa is a laggard; it is always slower than the DOW by a few days.
Fundamentals are sound. Alcoa is going to be highly profitable in 2012. Normalized earnings expected to be $2.50. Potential of $4 earnings per share by 2015.
Dividends expected to be raised by the second half of the year to an annualized rate of $0.50 which would definitely prompt more funds to buy this stock as the dividend yield would rise to 3%. The expected returns on this stock is going to be very high. Dividends will increase to $1 by 2015.
Notice the money flow index is rising upwards. It is currently at 37.15, when it crosses 50, it is a confirmation of a bull rally.
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