AA breaks back above 50-day moving average
Alcoa Corporation (AA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
AA finished Wednesday at 13.90 gaining $0.12 (0.87%) on high volume, strongly outperforming the S&P 500 (-0.46%). Trading $0.16 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 Sep 16, 2020):
Wednesday's trading range has been $0.38 (2.73%), that's below the last trading month's daily average range of $0.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AA. Prices continued to consolidate within a tight trading range between 13.68 and 14.39 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Homing Pigeon which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Homing Pigeon showed up on June 29th, AA gained 2.27% on the following trading day.
Alcoa managed to close back above the 50-day moving average at 13.86. Prices are trading close to the key technical resistance level at 14.24 (R1). After having been unable to move lower than 13.78 in the prior session, the share found buyers again around the same price level today at 13.70.
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 14.39 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 13.68 where further sell stops might get activated. Further selling could move prices lower should the market test August's nearby low at 12.92.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Its common bearish interpretation has been confirmed for Alcoa. Out of 199 times, AA closed lower 50.25% 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 56.28% with an average market move of -0.30%.