Go to the list of all blogs
Rick Pendergraft's Avatar
published in Blogs
Jun 08, 2020

Taking One Bearish Signal and Using It to Discover a Potential Problem for an Entire Industry

With the overall market screaming higher in recent weeks and with so many stocks in overbought territory, I went looking for bearish trade ideas that could be used to hedge my long portfolio.

I started my search with a quick screen of bearish signals produced by Tickeron's platform. There were 10 stocks that appeared from the screen, one of which was Alcoa (NYSE: AA). When I pulled Alcoa up specifically and started looking at other aluminum companies, I discovered a potential problem for the group as a whole.

The aluminum theme refers to companies engaged in making aluminum components and products. Crown Holdings, Inc., for example, designs and manufactures steel and aluminum cans. Tredegar Corp. produces plastic films and aluminum extrusions. SIFCO Industries Inc. makes metalworking products. Alcoa itself produces aluminum used by other companies in their own products.

For Alcoa, there was a bearish signal from the Bollinger Bands as the upper band was broken. A price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker or exploring put options. In 25 of 35 cases where AA's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued downward trend are 71%.

I also pulled up the fundamental analysis ratings on Tickeron and noticed that the Profit Vs. Risk Rating was a 100—the worst possible score a stock can get. It also got a poor score of 88 on the P/E Growth Rating. This led me to look at other companies in the aluminum industry and so I pulled up the group.

Looking at the fundamental analysis screener I found there were 10 stocks in the group. Seven of the 10 scored 100 on the Profit Vs. Risk rating while the other three stocks had scores of 93, 84, and 62. In other words, every single stock in the group is below average when it comes to Profit Vs. Risk right now. The only one that gets a score that is even close to average is Crown Holdings (NYSE: CCK).

After finding this information a little concerning, I jumped over to the technical analysis screener for the group. What I found there was that Alcoa wasn't the only stock in the group that had received a bearish signal from its Bollinger Bands. Eight of the 10 stocks have received bearish signals from the Bollinger Bands indicator within the last few weeks with five of them coming within the past week.

Looking at the success percentages, six of the 10 stocks with bearish signals show a probability of success of 70% or higher. That's a really high percentage for a group of six stocks.

The aluminum industry tends to be very dependent on growth in the overall economy for its own growth. If the economy is growing, the aluminum industry tends to grow as well. If the economy is shrinking, the industry tends to see a decline in earnings and revenue. This can be explained by looking at the products where aluminum is used. A lot of aluminum is used in packaging—soft drink cans, beer cans, etc. While many of these products are considered staples, they still tend to be somewhat dependent on overall economic growth.

Momentum for the market as a whole is clearly to the upside at this time. However, there will come a time where the euphoria wears off and we will see some selling hit the market. When it does, the aluminum industry could be one that gets hit particularly hard. This is based on the incredibly high Profit Vs. Risk ratings and the confidence levels from the bearish Bollinger Band signals.

Related Ticker: AA

Aroon Indicator for AA shows an upward move is likely

AA's Aroon Indicator triggered a bullish signal on April 01, 2024. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 211 similar instances where the Aroon Indicator showed a similar pattern. In of the 211 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on February 28, 2024. You may want to consider a long position or call options on AA as a result. In of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for AA just turned positive on February 29, 2024. Looking at past instances where AA's MACD turned positive, the stock continued to rise in of 43 cases over the following month. The odds of a continued upward trend are .

AA moved above its 50-day moving average on March 07, 2024 date and that indicates a change from a downward trend to an upward trend.

The 10-day moving average for AA crossed bullishly above the 50-day moving average on March 13, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 20 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AA advanced for three days, in of 278 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The RSI Indicator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.

The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 19 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where AA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

AA broke above its upper Bollinger Band on March 27, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.437) is normal, around the industry mean (1.969). P/E Ratio (7.319) is within average values for comparable stocks, (15.965). AA has a moderately low Dividend Yield (0.012) as compared to the industry average of (0.048). P/S Ratio (0.574) is also within normal values, averaging (667.078).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 69, placing this stock worse than average.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

Notable companies

The most notable companies in this group are Alcoa Corp (NYSE:AA).

Industry description

Aluminum is widely used in the industries like construction, packaging and automotive sector. The segment has seen increased demand for the lightweight variety in automobiles in improving fuel efficiency. The U.S. aluminum industry generates nearly $71 billion a year in direct economic impact (according to The Aluminum Association). Arconic, Inc, Alcoa Corp and Kaiser Aluminum Corporation are major aluminum companies in the U.S.

Market Cap

The average market capitalization across the Aluminum Industry is 6.09B. The market cap for tickers in the group ranges from 138.37K to 54.35B. DKIAF holds the highest valuation in this group at 54.35B. The lowest valued company is NORNQ at 138.37K.

High and low price notable news

The average weekly price growth across all stocks in the Aluminum Industry was 4%. For the same Industry, the average monthly price growth was 22%, and the average quarterly price growth was 41%. CENX experienced the highest price growth at 12%, while ALMMF experienced the biggest fall at -5%.

Volume

The average weekly volume growth across all stocks in the Aluminum Industry was -10%. For the same stocks of the Industry, the average monthly volume growth was -23% and the average quarterly volume growth was -13%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 38
P/E Growth Rating: 45
Price Growth Rating: 46
SMR Rating: 68
Profit Risk Rating: 69
Seasonality Score: -16 (-100 ... +100)
View a ticker or compare two or three
AADaily Signal changed days agoGain/Loss if shorted
 
Show more...
Ad is loading...
A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a miner of bauxite and aluminum

Industry Aluminum

Profile
Fundamentals
Details
Industry
Aluminum
Address
201 Isabella Street
Phone
+1 412 315-2900
Employees
13600
Web
https://www.alcoa.com
Ad is loading...
Discover the dynamic world of cryptocurrency trading with Tickeron's AI analysis. Capitalize on bullish and bearish patterns in Origin Protocol (OGN.X), with gains up to 27.80%. Stay ahead with Tickeron's real-time insights and make informed trading decisions. #CryptoTrading #AIAnalysis #OriginProtocol #InvestSmart
#latest#popular#patterns#artificial_intelligence#trading#technical_analysis
Dive into the world of trading excellence with our Best AI Robot of the week! In a market characterized by growth, the key to maximizing profits lies not only in mainstream large-cap stocks but also in exploring opportunities across different market segments.
This article delves into the performance of AI trading robots, specifically those utilizing the "Swing trader: Long-Short Equity Strategy (TA&FA)." These bots showcased their prowess by delivering a notable +4.98% gain while engaging in MRNA trades over the previous week. Beyond mere statistics, we explore the technical indicators and recent earnings report of MRNA to shed light on the underlying dynamics influencing the stock.
Artificial intelligence (AI) trading bots have become powerful tools for investors seeking active trading opportunities. In a recent analysis conducted on the "Day Trader: High Volatility Stocks for Active Trading (TA&FA)" platform, AI trading bots exhibited impressive performance, generating a noteworthy +4.81% gain while actively trading Shopify (SHOP) over the course of the previous week.
In the dynamic world of finance, strategic asset acquisition is a game-changer. Recently, a group of stocks within this domain has been in the spotlight, showcasing notable performances and intriguing patterns. This article delves into the recent movements of these stocks, focusing on key indicators, market capitalization, notable price events, and volume dynamics.
Urology companies, comprising EDAP (EDAP), Teleflex (TFX), and UroGen Pharma (URGN), have shown a remarkable +6.67% increase in performance over the last week. In this analysis, we delve into various indicators and metrics to better understand the current landscape and individual trajectories within this thematic sector.
In the ever-evolving landscape of financial markets, Artificial Intelligence (AI) trading robots have emerged as potent tools for investors seeking an edge. The recent performance of the AI trading robots accessible through "Swing Trader, Popular Stocks: Short Bias Strategy (TA&FA)" has caught the attention of market participants. Notably, these bots generated an impressive +10.22% gain in a week, with a focus on trading TSM (Taiwan Semiconductor Manufacturing Company).
In the fast-paced world of stock trading, artificial intelligence (AI) has become a game-changer, with trading robots demonstrating impressive results. The "Day Trader: Medium Volatility Stocks for Active Trading (TA&FA)" platform recently showcased the effectiveness of its bots, generating a notable +7.86% gain while actively trading AMD over the past week.
​​​​​​​Aluminum companies have witnessed a remarkable surge in performance, with a collective increase of +8.75% over the past week. In this analysis, we delve into the dynamics of this surge, focusing on key indicators and individual stock movements. The tickers in focus are CENX, AA, KALU, and CSTM.
​​​​​​​Propane gas companies, represented by tickers NGL, SGU, and SPH, have exhibited a remarkable +8.22% increase in performance over the past week. This surge is substantiated by various technical indicators, fostering a positive outlook for investors. In this analysis, we delve into key indicators, market capitalization, notable price movements, and volume fluctuations to provide a comprehensive understanding of the current landscape.
In the fast-paced world of AI trading, algorithms powered by sophisticated technical analysis tools are making waves. The "Swing trader: Top High-Volatility Stocks v.2 (TA)" bots have proven their mettle, securing a remarkable +6.02% gain in a week of trading AVGO.
Artificial intelligence (AI) trading robots have become an integral part of the market landscape. One such example is the "Swing Trader, Popular Stocks: Short Bias Strategy (TA&FA)" bot, which showcased impressive results with a +5.54% gain while trading LRCX over the past week. In this article, we delve into the technical analysis of LRCX, examining its recent earnings report and broader industry trends.
The drilling industry has recently experienced a commendable upswing, with a substantial 8.22% surge in performance over the past week. In this article, we will dissect the current dynamics of key players in this sector, focusing on prominent tickers such as DO, RIG, HP, NBR, NR, PDS, and PTEN.
In the realm of AI-driven trading, the "Swing Trader: ETFs for Growing Industries (TA)" platform recently showcased impressive results, with its trading bots generating a noteworthy +5.09% gain while actively trading TQQQ over the past week. As we delve into the intricacies of these AI trading strategies, let's dissect the recent earning results and market indicators to better understand the driving forces behind their success.
In the fast-paced world of AI-driven trading, the utilization of sophisticated algorithms and technical analysis tools is becoming increasingly prevalent. One notable example is the Trend Trader, Popular Stocks: Price Action Trading Strategy (TA&FA), which demonstrated its prowess by generating a commendable +5.02% gain while trading NVDA over the past week. Let's delve into the technical indicators and earnings results to gain a comprehensive understanding of NVDA's current market standing.
In the fast-paced realm of biotech and pharmaceuticals, a group of stocks, including giants like Johnson & Johnson (JNJ), Amgen (AMGN), Pfizer (PFE), Astex Pharmaceuticals (ATXS), AnaptysBio (ANAB), and Zymeworks (ZYME), witnessed a noteworthy 8.55% surge in performance over the past week. However, a closer look at various indicators suggests caution, signaling a potential downturn.
In the dynamic landscape of the energy sector, onshore oil exploration companies have recently experienced a remarkable upswing, with a notable 7.13% increase in performance over the past week. This surge has captivated market attention, and several key indicators point towards a sustained positive outlook. In this analysis, we delve into the financial health, market dynamics, and recent events surrounding prominent tickers in this domain - PXD, CNQ, PDS, PTEN, and FANG.
Tickeron's Quant team is delighted to introduce our latest AI-powered robot designed for trading small-cap stocks, employing a distinctive fundamental stock analysis algorithm. This algorithm, renowned for its blend of in-depth analysis and intuitive signal-following capabilities, is well-suited for both novice and seasoned traders.
In the dynamic world of stock trading, the utilization of AI trading robots has become increasingly prevalent. One such example is the "Trend Trader, Popular Stocks: Price Action Trading Strategy (TA&FA)," which showcased its prowess by yielding a remarkable +4.98% gain while trading ZIM over the previous week. As we delve into the intricacies of ZIM's recent performance, let's analyze the earnings results, market indicators, and industry trends that shape the narrative.
In the ever-evolving landscape of financial markets, artificial intelligence (AI) trading bots have emerged as powerful tools, providing investors with automated strategies to navigate the complexities of stock trading. In this analysis, we delve into the recent performance of AI trading robots, specifically those accessible through "Trend Trader, Popular Stocks: Price Action Trading Strategy (TA&FA)," which demonstrated a remarkable +4.67% gain while trading MRVL over the previous week.