Alcoa (AA) To Sell Part of Its Chalco Stake

Dow component and aluminum giant Alcoa reportedly plans to sell as much as $1.64 billion worth of its stake in Aluminum Corp. of China at a discount to the market price, according to Dow Jones Newswires. According to a report obtained by the wire service, the company's Alcoa International unit will sell 700 million Hong-Kong listed shares of ACH (also known as Chalco). Alcoa retains the option to sell its entire, 884.21 million-share stake in Chalco at a price between HK$17.26 and HK$18.27.

In today's trading, AA has taken a fractional loss to trade around 34. On a technical basis, Alcoa shares are looking up at a recently formed bearish cross from their 10-week and 20-week moving averages. Support from the stock's 20-month trendline could help lift the shares through this intermediate-term resistance.

Investors and analysts alike are bullish on the blue chip's prospects. Its Schaeffer's put/call open interest ratio of 0.47 is lower than 88% of other such readings taken in the past year, and the bears have sold short less than 2% of its available float. Finally, Zacks reports that analysts have awarded Alcoa 4 "strong buy" and 3 "buy" ratings, compared to just 3 skeptical "hold" recommendations.

Meanwhile, the shares of ACH are down nearly 12% this morning. The stock seems to be coming back down to earth after gapping well above long-term support from its 10-month moving average while ACH shares are currently trading around 58.50, this trendline support has just entered the 38 region.