Alcoa (AA) Elliott Update

Trading strategy The ambiguity of the forecast in the very short time frame should not affect our trading strategy since the overall forecast is bullish and now the price is in the overbought territory, which means that even it could be the third wave of an impulse, it might be wise to stay aside and wait for another trading opportunity with better risk/reward ratio. 1. We will seek to open long position when an oscillator will be in the oversold territory. 2. Price move to about 25 will support our primary scenario....Read more Elliott Analysis for Alcoa There is no change of the outlook for this stock. However, we could not find a comfortable entry point for taking long position with good risk/reward ratio. Previous week did not provide such an opportunity and even created some ambiguity for analysis in the very short time frame. We have two alternative scenarios that could be unfolding. 1. According to the first possible scenario in the very short time frame – we observe Wave (B) of the Flat and it is expected to complete in the price range 26.58 to 29.39, but more probably between 26.6 and 27.11. This wave is due to complete anytime from now until 19-Dec-2005, but is most likely to complete before 28-Nov-2005. After wave (B) is complete, expect the stock to continue down into wave (C). It will complete corrective Wave 2 which is expected to complete in the price range 22.28 to 26.23, but more probably between 24.28 and 25.82. This wave was expected to complete before 22-Nov-2005, and must complete by 20-Jan-2006. After this wave 2 is complete, expect the stock to continue up into wave 3. 2. We had already observed completion of Wave 2, which was rather short and now the stock price is in the Wave 3 of an Impulse and it should complete in the price range 28.48 to 32.12, but more probably between 29.13 and 30.39. This wave is due to complete anytime from now until 09-Jan-2006, but is most likely to complete before 06-Dec-2005.