Canadian aluminum company, Alcan (AL), had some decisions to make. Who's offer to take... Alcoa (AA), one of the globe's leading suppliers of bauxite, alumina and aluminum, or Rio Tinto (RTP), a leading company in mining and mineral processing. After Rio Tinto offered $101 (USD) per all Alcan's outstanding common shares (a total equity consideration of $38.1 billion), Alcan rebuffed on previous offer by Alcoa for $28.7 billion. Bloomberg suggests that speculators feel that Rio Tinto's bid will spark more aluminum-industry takeovers.
What About ALCOA?
How did Alcoa make out after the rejection? Well, with an open (7/12) of over 5.3% increase from previous days close, and since had an additional 3.8% increase in after hours trading between the 7/12 and 7/13. If MarketClub members had been using the suggested technique they would have been in a position to gain off the rejection of the Alcoa bid.
Alcoa - We were given a monthly green triangle on 11-22-06 @ 30.32. We could have taken this as in initial entry point, or we could have used it to signify that we should be taking long position on green weekly triangles. Let's say we used it to enter. We then use the weekly chart for exits and reentries. See table below for triangle signals loss and gains.
| Entry Date | Price | Exit Date | Price | Loss/Gain |
| 11-22-06 | 30.32 | 12-21-06 | 29.85 | -.47/share |
| 1-19-07 | 31.17 | 3-5-07 | 32.13 | +.96/share |
| 4-03-07 | 34.56 | 4-24-07 | 33.69 | -.87/share |
| 5-07-07 | 36.5 | 6-27-07 | 38.25 | +1.75/share |
| 7-12-07 | 42.9 | Current | 47.1 | +4.2/share if sold off |
| Up $5.48 Per Share |
Monthly Weekly
| Entry Date | Price | Exit Date | Price | Loss/Gain |
| 11-21-06 | 48.46 | 12-19-06 | 47.22 | -1.24/share |
| 1-12-07 | 49.78 | 3-1-07 | 50.11 | +.33/share |
| 4-09-07 | 53.78 | 6-26-07 | 81.5 | +27.72/share |
| 7-03-07 |
84.97 |
Current |
97.67 |
+12.7/share |
| Up $38.85 Per Share |
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Best Wishes,
Hi Lindsay
You are doing a great job. Thanks for putting us in touch with the great blog at RebelTraders. That guy has some very professional looking stuff out there and we can learn from him. I see you have invited him to share some insights at ino from time to time. Great work on building a trading community. You da MAN - even though you are a girl !! Keep up the good work and thanks for your consistent contributions.
Chuck at http://www.rebeltraders.net
p.s. - Today I was contacted by Lindsay, a wonderful lady at http://www.ino.com/ asking if I would be interested in providing some guest commentaries for their site. So from time to time I will provide her with some articles that I write and she will share with me some of their content in return. Thank you Lindsay for considering my market views as worthy for your site.
Thanks
TBeard