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Alcoa Is Trading above Its 100-Day Moving Average

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Moving average for the metals and mining sector

As of February 29, 2016, the metals and mining sector (XME) recovered 41% from its recent low of $11.97 on January 19, 2016. The weaker US dollar supported the movement of the SPDR S&P Metals and Mining ETF (XME). XME was trading 7% above its 100-day moving average. Major metals and chemical stocks such as Alcoa (AA), Nucor (NUE), Freeport-McMoRan (FCX), E.I. du Pont (DD), and Monsanto (MON) were trading 1.3% below their 100-day moving averages on an average basis.

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Alcoa was trading 2.6% above its 100-day moving average and 9.3% above its 20-day moving average. The stock crossed its 100-day moving average on February 22, 2016. Since January 20, 2016, the stock has been moving in an upward direction. The company reported its fourth quarter results on January 11, 2016. EPS (earnings per share) was $0.04 compared to analysts’ consensus estimate of $0.03.

Other metal stocks such as Freeport-McMoRan and Nucor were trading 3.4% and 1.6%, respectively, below their 100-day moving averages. Recently, Freeport has bounced back from its low. Since the end of January 2016, the stock has recovered its initial losses. As of February 29, 2016, it was 80% above its recent low of $4.30. Chemical stocks such as E.I. du Pont (DD) and Monsanto (MON) were trading 1.3% and 3%, respectively, below their 100-day moving averages.

Wall Street analysts’ consensus estimates

Wall Street analysts’ consensus estimates indicate an average 8.5% upside for FCX, AA, MON, DD, and NUE. Over the next 12 months, Alcoa could see an upside of 16.7% from its levels on February 29, 2016.

Wall Street analysts’ estimates for other major materials sector (XLB) companies over the next 12 months are as follows:

  • Freeport-McMoRan could see a fall of 16.4%.
  • Nucor could see a rise of 16.6%.
  • E.I. du Pont could see a rise of 9%.
  • Monsanto could see a rise of 18.1%.

In the next part of the series, we’ll look at the performance of the S&P 500’s (SPY) financial sector.

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