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Thoughts on Century Aluminum Company (CENX)

Posted: Fri Apr 03, 2009 11:12 am
by djflorence
Just wondering if anyone has some thoughts on Century Aluminum Company (CENX). Seems poised for a nice run.

Posted: Fri Apr 03, 2009 9:51 pm
by rhc
I see lower highs and lower lows. This sequence has been in effect since May 2008 & has not yet been broken, even taking onto account yesterdays 24% upside move on huge volume
By definition, the Trend is still down.

- Trendfollowers would keep away (from the long side)
- Bottom Pickers & 'bargain' hunters may want to have a go.

Which one are you?

Posted: Sat Apr 04, 2009 11:42 am
by stamo
When a stock is this low I treat it like an buying a call option with very long time to expiration. Only put in $ that you can afford to lose.

Posted: Tue Apr 14, 2009 2:20 am
by adamant
Some thoughts on the aluminum market if one wishes to take a "fundamental" view:

Global production capacity is about 50m tons. Shutdown of production has brought current production down to 32m tons while demand is expd at 30 million.

Assuming these numbers are correct, balance in the market is not far off, and one could assume that an entry point might be approaching. I would then look for signs of short covering in aluminum(that is, sudden rapid rises in aluminum prices) from financial players as a sign of the market becoming more balanced; this in turn should indicate that the wind is turning for aluminum producers.

I believe it is plausible that this scenario recently played out in the copper market, and that you could see indications of this in a chart of financial investor's net positions in copper vs the price (LME).

Posted: Tue Apr 14, 2009 7:49 am
by sluggo
Some thoughts on the aluminum market if one wishes to trade the metal itself, as opposed to trading shares of firms that mine or process it:

Last year's downtrend has ended / is ending with a relatively soft landing, a momentum trader's dream exit with very little give-back. A new uptrend seems to be developing, whose initial rise appears to be stronger in the alloys than in the base metal. Continuous 3-month forward contracts from the London Metals Exchange are shown below:

Posted: Tue Apr 14, 2009 10:59 am
by adamant
Thanks Sluggo. Good post.