Bull & Bear: Alcoa

Shares of Alcoa AA are trading lower on the session by 2.38%, at $15.99. With the company set to report earnings after the bell today, you have to wonder where shares could head next… Bulls: The bulls will note that, due to the recent rally, shares are trading above the 18-day and 200-day moving averages. These levels should now prove to be support on any sell off. The $15.00 level is also major support (where the stock recently bottomed from). Bulls will also note that call volume has been spiking over the past two weeks of trading as large players position for a further bounce in the name. A bullish trader could buy the August $16/18 call spread for a net debit of $0.58. Bears: Bears will note that the stock is heavily overbought and due for a pullback; actually shares have already craked the 50-day moving average intra-day. Bears will note that much of the positive price moment for aluminum is already built into Alcoa, leaving the company ripe for a miss and/or sell off on an inline quarter. A bearish trader could buy the August $15 put outright for a net debit of $0.36. Alcoa Inc. is engaged in the production and management of aluminum, fabricated aluminum, and alumina combined, through its participation in mining, refining, smelting, fabricating, and recycling. During the year ended December 31, 2010, aluminum and alumina represent more than 80% of Alcoa's revenues. Nonaluminum products include precision castings and aerospace and industrial fasteners.