Sell a Quarter of Alcoa
Metal stocks have had a stellar run of late—especially considering the relative weakness of other segments of the broad U.S. equity market. But if experience teaches us any lesson, it’s that when things look great, we should be on our toes and anticipating a possible reversal of fortunes (especially considering the cyclical nature of the industry group).
With that said, I’m making some adjustments to certain stocks and ETFs in our trading portfolio. Please note the stop-loss changes and profit-taking recommendations below.
Take a quarter profit in Alcoa (AA) after it has risen more than 10% from our initial entry point. I also suggest raising the stop-loss to slightly under 65 (closing basis) for the remainder of this trading position. SELL A QUARTER
I also recommend raising the stop-loss on our remaining long position in the iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT) to slightly under 125 on a closing basis, near the 25-day line in the daily chart.
For our position in the Invesco DB Commodity Index Tracking Fund (DBC), I recommend raising the stop-loss to slightly under the 22 level on a closing basis.
In our remaining trading position in Vale S.A. (VALE), I now recommend raising the stop-loss to slightly under 16 on a closing basis. Vale has given us 30% profit since December, but the stock is now starting to run up into what could prove to be strong overhead supply/resistance beginning at 18 and extending to 22. Moreover, the nickel market (which Vale partly represents) is admittedly becoming a bit overheated and could therefore exert a negative spillover impact on Vale and other nickel-related stocks.