Monday, September 20, 2010

CENX for Aluminum Shortage Play?

(Well RIMM was a dud...)

I bought a small position on CENX today, after seeing it was breaking out on a larger volume from a nice consolidation pattern that also has a MACD positive divergence.

Then I just read this news at

"(Kitco News) -Harbor Intelligence looks for three-months aluminum to hit $2,400 per metric ton on the London Metal Exchange in the weeks ahead. Harbor cites expectations that Chinese output will fall, given two years of “negative economics for producers” and pressure on smelters to cut production to meet energy-saving and environmental goals. The most recent data implies that China lost 6%, or a net 982,752 metric tons, of annualized aluminum output in July and August. Meanwhile, demand for semi-aluminum products (autos, construction, etc., which are the main customers of primary output) in China is rising, with a monthly gain of 14% in August, which amounts to annualized output of 2.9 million tons, Harbor says. Ultimately, demand for primary and scrap aluminum will accelerate due to a pick-up in final demand and re-stocking needs for semi-aluminum producers. “Our models show increasing risks of a strong rally in aluminum prices in the final quarter of this year,” Harbor says. A rise toward $2,400 in the fourth quarter will also exert upward pressure on regional aluminum premiums around the world, Harbor adds."

My buy point was $11.62. Trailing stop at 6% loss, first target is a gap-fill above $13.

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