Alcoa update [AA]

Backlink.

In this post from October 2013 the theme was to buy Alcoa as a safe play.  I wrote, "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.".  Well, AA quickly shot up since then but then stagnated in what is clearly a 4th wave triangle.  based on the latest data, it does seem like my initial price target will be hit.  Interestingly, the DJIA and $COMPX are in 4th wave triangles as well even though those ones are measured in days not months.  I model there to be a quick $3.50-$4 move in these shares which is not bad percentage moves for your average "investor".  As long as it stays above the lower rail it should be golden.

Unfortunately, it doesn't currently look good after that.  This whole move counts like a giant a-b-c which is where I got that $18 price target in the first place - it was the level of the prior 4th.  When I see 3 waves that will count out right into the level of a prior 4th then I get muy nervioso.  But the 5th wave is not in yet so unless it breaks down that lower rail right now, AA holders should do OK as long as they sell after 5 waves up are complete.  When the selling starts, and I mean the entire stock market all at the same time, it will likely get fast and furious in a hurry.  Of course other counts are possible so there is no reason getting too worked up until we get more data.  All the gambler needs to know is that the odds are very good that the blue path will be taken above before we need to worry about anything else.