Alcoa was a member of the exclusive club of 30, a.k.a. the Dow Jones Industrial Average, for more than a half-century, but it was scratched for Nike (NKE) back in 2013. Today, Alcoa is the raw aluminum operation that was recently separated from the aerospace and automotive supplier part of the business (Arconic). We don't have much price history to work with, but a chart of aluminum prices helps give a positive spin to the chart of the stock.
In this very limited daily bar chart of AA, above, we can still see a positive trend. Prices have been going up since early November. The short 20-day simple moving average line has a positive slope and the daily On-Balance-Volume (OBV) line has been climbing and confirming the price rally. Not much else we can add, but a look at aluminum prices can be helpful.
In this five-year daily chart of three-month London Metal Exchange aluminum prices (from Bloomberg), we can see prices have been firming all year. Prices are above the rising 50-day and 200-day moving average lines and they are nearing the major downtrend line. Metal prices have been strong even with a strong U.S. dollar, and that tells me at least the current rally probably has further to go on the upside.
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