Buy Alcoa, Baby. [AA]

In this most recent post on Alcoa I pointed to a low level chart breakout and suspected strongly that the top trend line of the ending diagonal would soon no longer imprison the shares.  Well, don't look now but I nailed it.   OK, just kidding, go ahead and look.  It's cool to go look. (that's my Robert Downey Jr. impression...  ;  )

Seriously though, I did pretty much nail it.  The key resistance in the down-sloping resistance line below has been broken through on increasing volume. Of course, if it breaks back down through then all bets are off but I really, really, really don't think so.  I'll give this a 90% confidence vote simply because the downtrend has been in place for so long now while at the same time Bernanke tried to taper and it failed at the same time that the GOP tried to get a debt reduction deal out of socialist traitor Obama and they lost too.  Additionally, Janet The Dove Yellen is now going to take over for Bernanke.  Add it all up and you get nothing but more debt, more money printing.  The American people are afraid what will happen if we stop and indeed they should be.  But they should be even more afraid of what will happen if the the fed starts to lose control of the con game, errr, treasury bond market.  If that happens then massive inflation could show up very, very quickly.

For now, the smart money plays the odds that government will continue to print and the world will continue to tolerate it some more.  My 18 month target price for Alcoa is $18.  Yes, I said it, perennial loser Alcoa gets an initial price target of more than double its current price within 18 months.  I should call it the Alcoa 18 in 18 deal. If your mom doesn't know where to park a nice chunk of her retirement, tell her to go for Alcoa and pick up the 1.4% dividend yield.  They will be raising this dividend as the automobile begins consuming a LOT more aluminum starting next year.

Nobody in Wall Street is calling this bottom on Alcoa right now.  Everyone has gotten used to losing money on it, and it was recently kicked out of the DJIA.  That official dismissal is oftentimes the proof that the herd has given up on a company at the bottom.  At the same time, the CEO thinks that Aluminum prices have bottomed.  Check it out.  One might consider buying Alcoa with a 2 year time frame and then posting a public thank you to the comments section of this blog post when it hits $18.  I don't give investment advice but I think it would be financially entertaining to see common folks that read my humble blog benefit from my opinions on this matter.