AA dominated by bears dragging the market lower throughout the day
Alcoa Corporation (AA) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
AA ended the week -15.19% lower at 35.67 after flat today, significantly underperforming the S&P 500 (1.42%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AA as at Oct 12, 2018):
Friday's trading range has been $0.96 (2.64%), that's below the last trading month's daily average range of $1.34. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for AA.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 40.71. The last time this happened on September 7th, AA gained 2.46% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 35.13 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Alcoa Inc. Out of 72 times, AA closed higher 59.72% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.94% with an average market move of 1.53%.