GO
Loading...

Amid Earnings, Buy Alcoa if It Holds This Level: Grasso

Friday, 6 Jan 2012 | 3:46 PM ET

Earnings season gets underway on Monday with Alcoa reporting after the close. And ahead of the results, the Fast gang smells a trade.

Shares of the aluminum giant traded lower after Deutsche slashed estimates to $10 from $12 saying demand for industrial metals will be hurt by the European debt crisis and a slowdown in emerging markets.

Those challenges and others have put pressure on Alcoa's share price, which fell about 10% in the fourth quarter and almost 44% for the year.

However, there is a sunny side to this situation; all the selling has sent shares down to a key level -- one which may prove to be support.

“Technically the stock broke down in late August” explains trader Steve Grasso. “Now the stock has to hold $9.10 for a couple days.” But if it does, that’s significant, if it does that’s an entry point. “If it holds that’s confirmation of support and I’d jump in.”

Jon Najarian sees opportunity too. “I’m not in it – but their major input cost is nat gas and that's been weak. I also think Alcoa is getting interesting.”

Analysts Smash Estimates on AA
Alcoa is set to report earnings Jan. 9th, after the bell just as analysts slash price targets for the stock. The Fast Money team discusses.


______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On Jan 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova owns APC; Terranova owns OXY; Terranova owns XOM; Terranova owns VRTS; Terranova owns IBM; Terranova owns CSCO; Terranova owns AXP; Terranova owns SBUX; Terranova owns CSX; Terranova owns SWN; Terranova owns AXP; J. Najarian owns AAPL; J. Najarian owns AKS; J. Najarian owns BAC; J. Najarian owns PNC; J. Najarian owns GS; J. Najarian owns NFLX; J. Najarian owns MSFT; J. Najarian owns AA; P. Najarian is long AAPL; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long WFC calls; P. Najarian is long NFLX calls; P. Najarian is long MSFT ; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long INTC; Weiss is long EUO; Weiss is short FXA; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Weiss is long EUO; Weiss is short FXA

For Steve Grasso
Stuart Frankel & Co and its partners own CSCO
Stuart Frankel & Co and its partners own CUBA
Stuart Frankel & Co and its partners own GERN
Stuart Frankel & Co and its partners own HPQ
Stuart Frankel & Co and its partners own HSPO
Stuart Frankel & Co and its partners own MU
Stuart Frankel & Co and its partners own NYX
Stuart Frankel & Co and its partners own PRST
Stuart Frankel & Co and its partners own XRX

For Doug Sipkin
Ticonderoga Securities LLC makes a market in (MS) security. Ticonderoga Securities LLC, in its market making capacity, sells to or buys from customers the securities of this company on a principal basis.

For Willie Williams
No disclosures

For Justin Patterson
There are NO disclosures.
Morgan Keegan does not allow its analysts or their immediate family members to hold a position of any kind in the securities of the companies they follow.

For Jason Gursky
Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to Boeing Co., Goodrich Corp., Lockheed Martin Corp., Northrop Grumman Corp., Precision Castparts Corp., Raytheon Co., Textron Inc.

Citigroup Global Markets Inc. or its affiliates beneficially owns 2% or more of any class of common equity securities of Goodrich Corp.

For securities recommended in the Product in which the Firm is not a market maker, the Firm is a liquidity provider in the issuers' financial instruments and may act as principal in connection with such transactions. The Firm is a regular issuer of traded financial instruments linked to securities that may have been recommended in the Product. The Firm regularly trades in the securities of the issuer(s) discussed in the Product. The Firm may engage in securities transactions in a manner inconsistent with the Product and, with respect to securities covered by the Product, will buy or sell from customers on a principal basis.



CNBC.com with wires.

  Price   Change %Change
AA
---

Featured

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.