Yes, Chalco is a rare earth play

We saw this coming four months ago, and now it looks like Wall Street is finally catching on to the strategic changes afoot in what was once the Aluminum Company of China.

UBS is highlighting the fact that Chalco (ACH, quote) is surging on news that it has teamed up with Guangxi Non-Ferrous Group to combine rare earth projects.

As the big broker’s analysts say, the market clearly likes this. Rare earths are hot. The prospect that ACH is getting into coal may be even hotter. Aluminum, not so much.

Our readers liked it too back in September and then again on Tuesday when it came up on Trading the Globe.

Going forward, watch $25.75 on the ADRs — a good 5% up from here — as a likely psychological test. Break that resistance, and ACH could be back on its way to its February highs, well above $32.