Market Review

Alcoa (AA/NYSE): general analysis

Current trend

Since the February 3-month high, Alcoa shares fell by 10.3%, renewing the monthly minimum at the end of the trading session on March 11. From the October 6-month high, the price has dropped by more than 29%. The instrument is under pressure from an operating loss in the aluminum segment of the company following the results of the 4th quarter of 2018, with a further decline in world prices amid growing exports from China.

Last week, Alcoa shares rose by 1.94%. Over the same period, the S&P 500 index increased by 2.18%.

Support and resistance

The issuer continues to trade in a protracted flat. The technical picture is still ambiguous. At the moment, #AA quotes are testing local support and resistance levels at 26.70 and 29.40. There is a potential for recovery. Indicators do not give accurate signals: the price crossed the MA (50); MACD histogram is near the zero line. It is better to open the positions from the key levels.

A comparative analysis of company multipliers and competing companies in the industry indicates the neutrality of #AA.

Resistance levels: 29.40, 31.45, 33.50.

Support levels: 26.70, 25.00.

Trading tips

Long positions can be opened after the price consolidates above the level of 29.40. The closing of the profitable positions is possible at the levels of 31.80, 34.20 and 36.50. Stop loss will be located at 27.00.

Short positions can be opened after the price consolidates below the level of 26.70 with the targets at 22.00–20.00. Stop loss is 29.10.

Implementation period: 3 days.

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 29.40
Take Profit 31.80, 34.20, 36.50
Stop Loss 28.60, 27.00
Key Levels 25.00, 26.70, 29.40, 31.45, 33.50

Alternative scenario

Timeframe Intraday
Recommendation SELL STOP
Entry Point 26.65
Take Profit 22.00, 20.00
Stop Loss 29.10
Key Levels 25.00, 26.70, 29.40, 31.45, 33.50

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