Technical Analysis – Alcoa stock exits from ascending triangle; lacks direction

Melina Deltas, XM Investment Research Desk

Alcoa stock is heading lower and seems to be exiting the squeezed Bollinger band channel and the ascending triangle formation, falling below the 19.48 support. The triangle had been holding since July 2017 when it started the sideline move.

From a technical viewpoint, the MACD is losing momentum below its red signal line and the RSI is still hovering in the negative territory but is pointing up, suggesting a possible recovery.

Should weakness extend below the 19.48 mark again, support to downside movements could initially be detected from the 18.10 zone, registered on October 2019. Clearing this zone, the stop could be around 16.44, taken from the trough on August 2019.

Alternatively, the stock needs to overcome the 100-day simple moving average (SMA) currently at 20.45 before hitting the 50-day SMA at 21.00. The 21.90 could act as resistance too near the 200-day SMA and the upper Bollinger band at 22.24

In the medium-term picture, the sentiment turned bearish after the price slipped below the triangle pattern.