AA unable to break through key resistance level
Alcoa Corporation (AA) Technical Analysis Report for Jan 15, 2020 | by Techniquant Editorial Team
AA ended Wednesday at 20.18 losing $0.19 (-0.93%), strongly underperforming the S&P 500 (0.19%). Trading $0.15 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (AA as at Jan 15, 2020):
Wednesday's trading range has been $0.43 (2.12%), that's below the last trading month's daily average range of $0.56. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AA.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 19.77 (S1). Unable to break through the key technical resistance level at 20.44 (R1), the share closed below it after spiking up to 20.48 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move above 20.54 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 20.48. The last time this happened on Monday, AA actually gained 3.88% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the nearby swing high at 20.54 where further buy stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Alcoa. Out of 353 times, AA closed lower 54.11% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.96% with an average market move of -0.18%.