Int'l Insights: Bullish Stocks
Pullback opportunities in global metals & mining stocks• Global mining stocks offer an attractive, mid-cycle pullback opportunity. From steel to copper and aluminum stocks, retracements over the past three months have stabilized at support, which we view as timely entry points that will lead to upside resumptions.
• Aluminum stocks are particularly attractive. Most major names have pulled back to long-term base support levels, some spanning 7-years in length. Examples include: Alcoa (AA), Aluminum Corp of China (2600-HK), and Norsk Hydro (NHY-NO). Buy.
• Copper stocks shrugged off the recent, and widely covered, dip in copper prices -- a sign of latent strength. We're seeing actionable patterns here, especially in the charts of Freeport-McMoRan (FCX; finally participating) and Teck Resources (TECK).
• Lastly, steel stocks continue to plot higher. Breadth is attractive, and a variety of actionable entry points are visible in names such as Vale (VALE3-BR), POSCO (005490-KR), Nucor (NUE), Steel Dynamics (STLD), Evraz (EVR-GB), Salzgitter (SZG-DE), etc. In certain names, patterns are repeating themselves; for example, NUE's 9-year base resembles the ‘94-04 base, which sprung a strong, four-year uptrend.
• The following pages contain actionable charts, sorted by market capitalization.
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Alcoa is a vertically integrated aluminum company comprised of bauxite mining, alumina refining, aluminum production (smelting, casting, and rolling), and energy generation. Through direct and indirect ownership, the company has 30 operating locations in nine countries around the world, situated primarily in Australia, Brazil, Canada, Iceland, Norway, Spain, and United States.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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