Century Aluminum (CENX) sold off from $80 to $1 during the bear market and bounced to the 38% selloff retracement in 2011. It pulled back in a broad rounded correction that posted a higher low in 2013 and rallied above the prior high in August of last year. That breakout failed in March of this year, in a high-volume decline that's now reached the 78.6% retracement of the two-year uptrend.
This is the last stop before a roundtrip to the 2012 low near $6. Major distribution starting in December is ongoing, with no evidence that institutions are building positions despite a couple of buy spikes.
Bottom line: There's no reason to be the first one back into this ferocious downtrend because it will take months of basebuilding to start a new uptrend. Even then, upside will be limited to the February breakdown in the low $20s.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
GrafTech International makes specialized graphite electrodes for electric arc furnaces and it should have pricing power because of its niche business.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.
Email
Email sent
Thank you, your email to has been sent successfully.
