AA Alcoa
Weekly Options Trade Analysis
Direction— AA is attempting to push herself into bullish territory but may be forming a trading range it will stay in.
Bollinger Bands— having touched the top of the Bands, AA rests on the top of the middle Band as of Friday. This may be a sign of strength if we can get her to continue moving up. The upper resistance and lower support will clarify the strength AA has in this move when we come to those lines.
RSI— AA has found support with RSI. It continues to show bullish movement; so one would think to design a weekly option strategy that is bullish. Not so quickly, for the RSI shows strength but the support is weak. We have yet to reach the ‘50’ level in this move. Be cautious.
MACD— the MACD, like the RSI shows bullish support but it is also weak. AA is trying to push up, but is having a hard time moving into bullish territory. Therefore we are extremely cautious when recommending Bullish Weekly Option Plays. There is just too much weakness here.
Chart— We seem to be building a rising wedge. This is continually showing us reversal patterns, so we are waiting for AA to become bearish very soon.
Trade Recommendations— AA is not giving us any signs of strength in this movement. It is more of a struggle to move up. For this reason, any weekly option strategy should take into account a bullish move to about 13.5 and then hit resistance and move back down. Look for a very short bullish run an then a longer bearish walk. Create your option strategy accordingly.
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