Alcoa (AA - option chain) stock is trading lower with other aluminum stocks this morning on reports that premiums for aluminum shipments to Japan will likely fall during the first quarter of 2011. A report stated that analysts believe aluminum premiums are already in a downtrend and could dip as much as 10%. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AA.

This morning, AA opened at $13.10. So far today the stock has hit a high of $13.14 and a low of $12.96. As of 12:30, AA is trading at $12.99, down $0.30 (-2.3%). The chart for AA looks bullish and S&P gives AA a positive 4 STARS (out of 5) buy ranking.

Analyst Upgrades

• Intel (INTC) was upgraded to overweight from equal weight and Autodesk (ADSK) to equal weight from underweight at Morgan Stanley.
• Citigroup upgraded Blackrock (BLK) to buy from hold.
• 99c Only Stores (NDN) was upgraded to buy from hold at Deutsche Bank.
• PetSmart (PETM) was upgraded to overweight from equal weight at Barclays.
• Piper Jaffray upgraded Ruth's Hospitality (RUTH) and Morton's Restaurant (MRT) to overweight from neutral.
• BioMed Realty (BMR) was upgraded to market perform from underperform at FBR Capital.
• Wells Fargo upgraded Piedmont (PDM) to market perform from underperform.

Earnings season has kicked off and Wall Street has decided to ignore the bad jobs numbers from this morning in favor of quantitative easing coming from Ben Bernanke and friends at the Fed. Today we also finally broke 11,000 on the DJIA and are within about 3% of a year high now.

Here were today's closing bell levels:

Dow Jones 11,006.48 +57.90 (0.53%)
S&P 500 1,165.15 +7.09 (0.61%)
Nasdaq 2,401.91 +18.24 (0.77%)

TOP ANALYST CALLS

I last discussed aluminum company Alcoa (AA) back in July. At that time, its price was roughly around the $11 mark. Thursday, the stock closed the regular session at $12.20. During the extended-hours trading that followed, the stock rose 2.8% to $12.54 in reaction to the release of the third-quarter report. The 52-week low for the shares is $9.81, so they're comfortably above that level. It's time for long-term investors and short-term participants to decide how the stock looks now that the numbers are out.

Let's first go to the one-year chart. Such a graphic doesn't make things easy, does it? The overall pullback makes the stock appear weak, but I nevertheless see an equity that wants to clear some more resistance levels if only the rest of the market will help it out.

Alcoa (AA), Marriott (MAR) and Yum! Brands (YUM) kick off the new earnings season this week. Analysts surveyed by Thomson Reuters are looking for moderate year-over-year earnings and revenue growth in the third quarter from each of these dividend payers.

Note that Marriott and Yum! Brands have exceeded consensus estimates in recent quarters and have First Call consensus buy recommendations as well. They are also trading near their 52-week highs, while Alcoa shares are closer to the 52-week low despite a 22% rise in the past three months.

Calls were the options of choice on Alcoa (AA) Thursday, according to data from the International Securities Exchange (ISE). During the course of the session, speculators on the ISE bought to open 1,255 calls on AA, compared to just 56 puts. The equity's single-day ISE call/put volume ratio of 22.41 underscores a distinct preference toward bullish bets over bearish.

Thursday's most popular strike was AA's October 12 call, where 1,669 contracts crossed the tape -- about 93% at the ask price, confirming they were most likely purchased. Open interest at this strike climbed overnight by 1,391 contracts, and now stands at 57,578 open positions.

Alcoa Inc. (AA), a leading producer of alumina and aluminum, is scheduled to discuss its second-quarter 2010 financial results Monday, July 12, in a conference call beginning at 5:00 PM (ET) hosted by CEO Klaus Kleinfeld and CFO Chuck McLane. You can catch a live webcast at Alcoa's website.

During the three months that ended in June, Alcoa appointed a new CEO, announced an acquisition and declared a quarterly dividend. Analysts surveyed by Thomson Reuters expect this New York-based company to report earnings of $0.12 per share, compared to year-ago loss of $0.26 per share. Its revenue is expected to have risen 18.9% from a year ago to $5 billion.