Close to Key Levels - Alcoa

New York, July 1st (TradersHuddle.com) - Shares of Alcoa, Inc. ( NYSE:AA ) closed the trading session at $15.82 near its 50 day and 200 day moving averages currently set at $16.25 and $15.31 respectively. Alcoa's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

Alcoa Inc. ( NYSE:AA ) produces primary aluminum, fabricated aluminum, and alumina, and participates in mining, refining, smelting, fabricating, and recycling. Its products are used in aircraft, automobiles, commercial transportation, building and construction, oil and gas, defense, and other industrial applications. Alcoa was founded in 1888 and serves customers worldwide.

Alcoa price action seems to be setting up for a tight range between the 200 day moving average as support and the 50 day moving average serving as resistance.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter Alcoa with a small position and wait for the stock to break out above the 50 day moving average at $16.25, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 200 day moving average set at $15.31 breaks it could mean further downside in the horizon for Alcoa.

Rally could spell pullback for stocks - Best Growth Stock Investment

By Chuck Mikolajczak

NEW YORK (Reuters) – A pullback could be on the table next week for stocks after their best weekly performance in two years, especially if a raft of data headlined by the June jobs report doesn’t bolster the argument of a strengthening economy.

Stocks rose for five straight days as the fog of the Greek debt crisis appeared to once again be lifted while better-than-anticipated economic numbers such as Friday’s manufacturing data gave weight to the belief the U.S. economy was starting to recover from a soft patch.

“What we are looking at is a market that is going to focus on the economic numbers,” said Peter Cardillo, chief market economist at Avalon Partners in New York.

“We had real good gains toward the end of the quarter so it wouldn’t surprise me to see a little bit of profit taking before we get those numbers out during the course of the week.”

Data expected for next week includes factory orders for May, the ISM services index and several indicators on the labor market, including Friday’s report.

“It is a little bit early to declare victory over the mid-cycle slowdown we’ve had,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

“On Friday, you have payrolls, unemployment rate — the big Kahuna — and there might be some trepidation going into it, especially with the market having already rebounded sharply here over several days.”

Even with the economic data on the docket for next week, volume is expected to remain light due to the market holiday on July 4th, which could exacerbate swings in the market.

Aside from the additional spike in volume brought about by the final reconstitution of Russell Investments by its indexes on June 24, average weekly volume has been among the lowest of the year for several weeks.

BULLS AND THE BUDGET DEFICIT

The light volume may prove to be an advantage for the bulls, however, especially after the S&P 500 <.SPX> successfully bounced off the 200-day moving average, a key technical support level, and jumped back over the 50-day moving average, which represented a resistance point.

“The mindset is an opportunistic ‘risk on’ trade and it is giving a lift to the market in spite of the fact that most people are scratching their heads. But that is what happens, particularly when there is very light volume, momentum dictates trend, and that is what we find ourselves in,” said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

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