Alcoa Corp (NYSE: AA)

Alcoa Corporation produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Brazil, Canada, and internationally. The company operates through Bauxite, Alumina, and Aluminum segments.

Take a look at the 1-year chart of Alcoa (NYSE: AA) below with my added notations:

1-year chart of Alcoa (NYSE: AA)

Since its February peak, AA has formed a clear, trend line of resistance (red). AA has repeatedly tested this line over the past week. The line of resistance is currently approaching $21, and a break above that line should mean higher prices, overall, for the stock.

The Tale of the Tape: AA has a down trending resistance. A break above that resistance should mean higher prices for the stock, thus a long trade could be made.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!
Christian Tharp, CMT