Alcoa (AA) is still pointed up, but the pace of the advance has slowed. When we covered the stock a month ago, we were not too sure of the direction, noting that "AA could continue higher, as our technical indicators are in good shape. A trade up to $45.28 will be a breakout, but if current weakness in the price of copper spreads to aluminum and other metals, we could see AA pull back to around $41."
With hindsight we can see (chart below) that AA did continue higher to short of $49, but there is more to tell.
Let's check the latest charts and indicators.
In this daily bar chart of AA, above, we can see three advances and two corrections. Prices are above the rising 50-day and 200-day moving average lines. Volume is pretty neutral looking but it should have, ideally, expanded in the latest rally from June. The On-Balance-Volume (OBV) line did move up from late June but it has stalled since early September.
In the lower panel is the 12-day momentum study and it shows weaker readings and a bearish divergence since early September. This divergence may be foreshadowing a third correction.
When the price of AA is viewed on a weekly chart, above, the subtle negative signals disappear.
This Point and Figure chart of AA, above, shows a bullish upside price target of near $57.
Bottom line: If long AA, hold, but I would raise sell stop protection to a close below $44 for traders. Investors might consider a stop below $42.