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PRIME
STOCK NEWSLETTER FOR September 26th, 2008 |
Position
Statement: In our Prime
Recommendation Letter we attempt to identify the
recommendation with the highest probability of
moving higher. We recommend that stop orders
be placed at the time of purchase, and once
the position has moved profitable we recommend
a stop be placed a minimum of $0.375 above the
purchase price and moved higher as the position
moves higher. |
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Today’s Comments:
The overall market finished Thursday strongly higher in a broad based move that saw the vast majority of the sector indices I track move higher on the day. Strongest sectors on the day were the Technology, Oil & Gas, Computers, Banking, Retailers, Insurance, Pharmaceuticals, Healthcare providers, Commodities, and Consumer indices. The market remains in a continuing state of flux, with major events unfolding continuously and changes occurring without warning. The entire financial system is in disarray at this point in time with people pinning their hopes for a recovery on Congress, which has got to be the mother of all Hail Mary passes. Let us not forget that while President Bush may not be the most popular politician in America right now, Congress's approval rating is about half of the President's. What the US economy needs right now is real structural reform. Things I have been writing about, and will be continuing to write about in the Sterling Weekly. Unfortunately, I do not see this happening with the current Congress; and as much as I support the principals behind the current plan, I do agree with several the Congressional Republicans such as Senator Shelby who are pressing for needed reform. Until we get something concrete and passed, the trend of the market is going to remain lower. The Bottom
Line: The overall market should move
lower.
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Sterling
Calendar for September 26th, 2008 |
Date: |
Comments: |
09/26 |
KB Home 'KBH' reports earnings before the open. Est. ($1.25) |
The
full earnings calendar for this week can
be found (here) |
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Recommendation: SELL/SHORT
Alcoa, Inc. 'AA ' |
Company:
Alcoa, Inc. |
Symbol:
'AA' |
Closing
Price: $24.92 |
Web
www.alcoa.com |
YH: $44.77
YL: $23.09 |
EPS: $2.42
P/E: 10.31 |
Shares
Outstanding: 813 Million |
Forecasted
EPS:.$3.37 |
Market Cap.:
$20.27 Billion |
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Dividend:
$0.68 |
Yield:
2.7% |
Aver.
Daily Trading Volume: 14.5
Million Shares |
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Price Targets:
$22.85 and then $18.80 |
Upside Stop:
$25.59/share |
Options Rec.:
Jan 25 Puts @ $2.89/contract |
Options
Symbol: AAME |
Additional
information on Alcoa, Inc. "AA'' can be found (here) |
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Company Description: Alcoa, Inc. engages in the production and management of primary aluminum, fabricated aluminum, and alumina worldwide. The company involves in the technology, mining, refining, smelting, fabricating, and recycling of aluminum. Its products include precision castings, industrial fasteners, consumer products, food service and flexible packaging products, plastic closures, and electrical distribution systems for cars and trucks. The company offers flat-rolled products, such as sheet and plate, foil products, and can reclamations; extruded and end products, including extrusion, tube, and architectural products; engineered solutions that comprise aerospace products, automotive components, Alcoa electrical and electronic solutions, castings, auto engineering products, and fasteners; and packaging and consumer products, which include flexible packaging, foodservice packaging, closures, and polymerization and extrusions. Alcoa�s products are used in aircraft, automobiles, commercial transportation, packaging, consumer products, building and construction, and industrial applications. The company has bauxite mining interests in Australia, Brazil, Guinea, Jamaica, and Suriname. It also has a joint venture with China International Trust & Investment Company to produce aluminum rolled products in China; and with Elkem Aluminium ANS, a supplier of metals and materials. The company was founded in 1888 and is based in New York, New York.
Chart updates daily |
A
full list of the news headlines
for Alcoa, Inc 'AA'' can
be found (here) |
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Our Analysis: The shares of Alcoa, Inc. 'AA' set a new multi-year closing year low yesterday on heavier than normal trading volume. This is a very bearish trading signal. The shares of 'AA' are also a component of the Dow Jones Industrial Average 'INDU' which I have rated as moving lower from their current levels. In the process of setting a new multiyear closing low yesterday the shares of 'AA' closed below a key support level. As a result they should continue to move lower and test $22.85/share, a point of support establishing in early October of 2005. If the shares of 'AA' close below that level, then they should continue to move lower and test $18.80/share, another point of support that was established in March of 2003. I see upside resistance on the shares of 'AA' @ $25.17/share, and have set my stops accordingly at $25.59/share. |
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Stocks
Looking Higher |
ESSA, FL, MYGN, SWS, JPM, XOM, T, HAL, MRK, VLO, TSO, NVDA |
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Stocks Looking Lower |
WM, INTC, WFC, ABK, GM, COF, AA, X, SBUX, JBL, UTX, CDNS, DE |
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Yesterday's
Edition of the Prime Stock Newsletter |
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If you would like to contact us our # is 800-275-6901,
fax # (404)-816-8830 Email address is: enelson@sterlinginvestments.com
Sterling Investment Services may hold positions
in the securities recommended or may be providing
consulting services to the companies mentioned
within this report. |
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