AA closes higher for the 2nd day in a row
Alcoa Corporation (AA) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, AA ended the month 22.04% higher at 11.24 after gaining $0.25 (2.27%) today, outperforming the S&P 500 (1.54%). Closing above Monday's high at 11.19, the market confirmed its breakout through the prior session high after trading up to $0.17 above it intraday.
Daily Candlestick Chart (AA as at Jun 30, 2020):
Tuesday's trading range has been $0.62 (5.72%), that's slightly below the last trading month's daily average range of $0.82. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for AA.
In spite of a weak opening the stock managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on June 25th, AA actually lost -7.61% on the following trading day.
Prices are trading close to the key technical support level at 10.86 (S1). After having been unable to move lower than 10.70 in the prior session, the share found buyers again around the same price level today at 10.74.
Alcoa shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could speed up should prices move below the close-by swing low at 10.70 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Alcoa. Out of 58 times, AA closed lower 60.34% 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 50.00% with an average market move of -1.81%.