AA closes within previous day's range
Alcoa Corporation (AA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AA ended the week 0.77% higher at 15.67 after losing $0.08 (-0.51%) today on low volume, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AA as at Feb 14, 2020):
Friday's trading range has been $0.51 (3.23%), that's slightly below the last trading month's daily average range of $0.57. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AA.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on October 24, 2019, AA actually gained 1.35% on the following trading day.
After having been unable to move lower than 15.45 in the previous session, the stock found buyers again around the same price level today at 15.42.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 16.21 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 15.15 where further sell stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for Alcoa. Out of 307 times, AA closed lower 49.51% 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 51.14% with an average market move of -0.16%.