Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Aug 11, 2020
Aluminum Stocks Soaring—Before and After Tariff Reinstatement

Aluminum Stocks Soaring—Before and After Tariff Reinstatement

Few industries have outperformed aluminum over the last three months. This past week President Trump announced that he would reinstate a 10% tariff on Canadian aluminum that enters the United States. That announcement could have disrupted the rally in some aluminum stocks, but that doesn’t seem to be the case.

The Tickeron aluminum industry group has six stocks in it. It features companies like Alcoa Corp (NYSE:AA) and Arconic Corporation (NYSE: ARNC). Aluminum is widely used in industries like construction, packaging, and the automotive sector.

Aluminum has seen an increase in demand from the automotive industry because it helps improve fuel efficiency. The U.S. aluminum industry generates nearly $71 billion a year in direct economic impact according to The Aluminum Association.

Looking at the industry performances on Tickeron’s Group Screener, the aluminum industry has moved up 14.65% in the past week and that is the third best performance. The rally in the industry has been pretty persistent too because if we look at the top performing industries over the last month, aluminum is seventh in terms of top performances at 26.95%. And if we go out to the top performances in the past quarter aluminum is third once again with a gain of 85.18%.

Looking at the six stocks included in the group, Tickeron has a positive outlook on this group and predicts a further increase by more than 4.00% within the next month with a likelihood of 57%. There is one stock rated as a “strong buy”, four are rated as a “buy”, and one is rated as a “sell”. Arconic is ranked the highest as the strong buy.

The lone “sell” in the group is Aluminum Corporation of China (NYSE: ACH). Ironically, the company has the best fundamental ratings of any stock in the group, but the scorecard is more short-term in nature and sees the stock struggling in the coming days.

None of the other companies do very well in the fundamental categories. One area in particular that is worrisome is the Profit Vs. Risk Rating. Four of the companies get the worst possible score of 100 and the other two have scores of 98 and 96. Those are extremely high and are likely the result of the big run up in the stocks over the last three months.

The stocks fare much better on the technical analysis screener and two indicators in particular show bullish signals across the board. All six stocks have received bullish signals from the MACD indicator within the last five days. All six have also received bullish signals from the Momentum indicator within the last three weeks.

As I was researching the six stocks in the group, I looked at a couple of the sentiment indicators for each stock. I looked at the overall analysts’ ratings and I looked at the short interest ratios for each stock. The table below shows the results of that research with the analysts’ ratings scored as buy, hold, and sell ratings.

I was very surprised by how little analyst coverage these six stocks are getting. Alcoa is a household name and only has 12 analysts covering it at this time. Howmet Aerospace is the only other stock with more than three analysts covering it.

Even the few analysts that are covering these stocks aren’t very bullish on them. There are a total of 24 analysts’ ratings on these stocks with only seven “buy” ratings. There are 16 “hold” ratings and there is one “sell” rating. If we look at the collective ratings, only 29.2% of them are buy ratings. That is woefully low considering the buy percentage for the average stock is between 65% and 75%.

What this information suggests to me, based on a contrarian line of analysis, is that we could see aluminum stocks continue to rally. There is very little chance of massive downgrades since the ratings are so low already. If anything we are likely to see an increase in coverage for the group and potentially upgrades. The odds of seeing upgrades is certainly higher than the odds of downgrades.

The average short interest ratio is in the 3.0 range. We see with this group that there are three stocks with short interest ratios that are higher than average and three with ratios that are lower than average. The thing to remember about short interest ratios is that a high one can help push a stock higher if the short sellers have to cover their positions. A low short interest ratio doesn’t mean it will force the price lower if the stock doesn’t rally.

Related Tickers: ARNC
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.