Alcoa’s technicals show more promise despite high operating costs and low aluminum prices still negatively affecting the share price. Alcoa recently made a deal to acquire Alumina Limited for $2.2 billion, which is seen as positive by traders.
(AA Weekly Logarithmic Chart)
Alcoa’s share price has been on the rise for four weeks now. The previous three weekly bars came with above-average volume, and implied volatility has increased as well. Technically speaking, the chances of a bullish breakout seem to be increasing. The current weekly bar turned positive after a downward reaction and is now above the upper line of the wedge formation. The upper line is near the 50-week moving average as well. If the bar holds out strong with another above-average volume, the momentum might continue in the coming weeks. The possible targets for upward moves are the upper line of the medium-term trend channel that started in October. The upper line is currently at 36.23. Above it, the 200-week moving average might create significant resistance, which is near 38.30. Of course, this week’s close will be a key indicator of whether Alcoa will be able to hold onto the recent gains.
