One of the stocks showing optimism in today's option skew post is Aluminum Corp. of China Limited (ACH). This seems peculiar because this occurred as the stock was hitting a new annual low yesterday. As a contrarian, I view optimism on a weak stock as a warning sign.
Chart Courtesy of Thomson FinancialAfter holding support near 34 for most of this year, shares of ACH have now broken below that range. The short-term RSI shows they are oversold but that former support now looms as potential overhead resistance.
In other words, the oversold reading could suggest the shares are due for a bounce but the weak technical picture and optimism suggests it may be short-lived.
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