Stock to watch for Monday- AA

On Monday we are going to watch Alcoa Inc. AA.
All its headlines were rosy until Sept. 15th when it announced this:

NEW YORK (TheStreet) -- Shares of Alcoa  (AA_) fell in morning trading Tuesday after the world's third-largest aluminum producer announced a public offering of 25 million depositary shares to help fund its acquisition of Firth Rixson.

The offering could reach 28.75 million depositary shares if underwriters exercise their full overallotment option of 3.75 million shares. Each depositary share represents a one-tenth interest in a share of Alcoa's Class B Mandatory Convertible Preferred Stock, Series 1, par value $1 a share, $500 liquidation preference per share of mandatory convertible preferred stock, equivalent to $50 per depositary share.

The stock was down 0.67% to $16.28 at 10:52 a.m.

Then it came out a day or so later that:

NEW YORK (TheStreet) -- Shares of Alcoa  (AA_) rose 0.48% to $16.24 in morning tradingWednesday after Morgan Stanley  (MS_) issued an "overweight" rating with an $18 price target.

"We have an Overweight rating on Alcoa because: 1) we think aluminum fundamentals have bottomed and we have entered a period of sustainable price recovery; 2) Alcoa is one of the small number of suppliers in very high-growth automotive sheet market; and 3) we expect earnings from aerospace and packaging business to improve," the firm said in a research note.

What I find interesting is otherwise, people have a very rosy outlook on this stock. An glowing review by Zacks in early sept. and a great review by the wall street journal and then this price target.

I also find this very interesting..look at this chart:

Could this be an example of people in the know knowing ahead of time that the company was going to release millions of shares? Price action suggests that it does.

Anyway, this company is going to have a good earnings announcement along with the fact that Morgan Stanley priced a target at 18 dollars makes this stock a solid buy. The insider selling of the stock that occurred during the last few days will only strengthen the need for the stock to bounce to where it should be .I would suggest the 16's October Options. If the market drops a bit at open because Asia is having some problems this weekend, fine, still buy it..it will have even more discounted option prices. If the market is going up, still puchase it and ride it up.

Good Trading,
Mark