Finding Strength Outside Tech

Strong charts aren't just reserved for tech names. I have to admit I have not been a fan of Alcoa (AA). This stock is the butt of every joke that kicks off earnings season, but suddenly the chart has come to life. I would caution that AA is not a pound-the-table, screaming buy just yet. The stock has some work to do in the $12.15 to $12.25 range. I view that area as a double-top. My preferred entry would be on a retest of the uptrending support line currently around $11.50, but I would guess it would be closer to $11.60 by the time price gets to that area. One thing we need to see is momentum, as shown by the RSI not move under the 50 level. I'm not sold on AA, but I simply can't have a negative view on it.

AA Source: StockCharts.com View Chart » View in New Window »

Bulk shippers, like Eagle Bulk Shipping (EGLE) have caught my interest as well. A few other shippers, like Knightsbridge Tankers (VLCCF) and Kirby (KEX) have attractive charts in addition to EGLE. There is a huge 28%-plus short interest in EGLE and, based on this chart, a move above $5 could incite a giant short squeeze that could take the stock all the way back to $6.50. That would be a huge move for a $5 stock. The momentum is clearly there; it is simply the price standing in the way. The challenge is the stop is much lower, around $4.20 per share, or even $3.60. I like buying the group of these three rather than just a single name....120 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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