23 JULY 20124-Traders
Chalco is showing bearish trend
Edited by : AL CIRCLE
1 min read
Aluminum Corporation of China Limited, also known as Chalco, is a producer of alumina and primary aluminum in China. The Company refines bauxite into alumina and smelts aluminate to produce primary aluminum.
The company suffers from industrial commodities low prices. From a fundamental viewpoint, the group is in a bad financial situation. The company is worrying with an important debt level. Leverage is at 8.13x for the current year. Analysts have recently downgraded their forecasts for earnings per share, with EPS close to 0 for this year. This indicator is often a precursor of a declining profitability and a worsening climate of investor confidence.
Technically, the share is in a downward trend. The moving averages are decreasing and are still above prices, thereby stopping any rebounds.
Taking into account fundamental and technical elements, investors can initiate a short position on the stock in the case the breakdown of mid-term support of CNY 6.11. A return toward CNY 6.39, the short-term resistance area, will invalidate the bearish strategy, which justifies a stop loss.
The company suffers from industrial commodities low prices. From a fundamental viewpoint, the group is in a bad financial situation. The company is worrying with an important debt level. Leverage is at 8.13x for the current year. Analysts have recently downgraded their forecasts for earnings per share, with EPS close to 0 for this year. This indicator is often a precursor of a declining profitability and a worsening climate of investor confidence.
Technically, the share is in a downward trend. The moving averages are decreasing and are still above prices, thereby stopping any rebounds.
Taking into account fundamental and technical elements, investors can initiate a short position on the stock in the case the breakdown of mid-term support of CNY 6.11. A return toward CNY 6.39, the short-term resistance area, will invalidate the bearish strategy, which justifies a stop loss.
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