Tuesday's Hottest Small Caps Follow Upgrade Lead of Large Cap

Between a wave of upgrades of the industrial sector, the aluminum industry specifically, and some encouraging words in the latest edition of The Wall Street Transcript, it's no wonder Alcoa, Inc. (NYSE: AA) was up so nicely on Monday. It helped smaller aluminum brother Century Aluminum Company (NASDAQ: CENX) even more though; the small cap was up 7.6%.

In fact, the small cap aluminum sector was the leading small cap group on Tuesday. That includes Century Aluminum, and Kaiser Aluminum Corporation (NASDAQ: KALU), which was up 2.0%. Considering the small cap aluminum index is the biggest loser among all small caps year-to-date, the sudden renewal of bullishness is not only interesting, but perhaps also trade-worthy.

How so? The S&P Small Cap Aluminum Index just pushed off a long-term support line - the fourth time this line has been touched and verified as a support area since the March-2009 low. No upside momentum has been developed yet, but there was none developed in front of the prior three rallies either.

Century Aluminum Company will report its Q4-2009 earnings on Tuesday, February 23rd after the market closes. Analysts expect an EPS of $0.03; it would be the first positive EPS in over a year.