Aluminum producer Alcoa ( AA) is due to report its latest quarterly figures after the close of trading Wednesday.
When we reviewed the charts of AA on Dec. 23 we recommended that traders "Continue to hold longs but raise stops to $50. $74, $79 and then $92 are our price targets for now." AA has not reached our $79 price target but let's check on the charts again ahead of earnings.
In the daily bar chart of AA, below, we can see that AA made a new high for the move up in January. Prices are above the rising 50-day and 200-day moving average lines.
The daily On-Balance-Volume (OBV) line made a strong move higher in December/January telling us that buyers of AA have been very aggressive. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed to the downside for a take profit sell signal.
In the weekly Japanese candlestick chart of AA, below, we see a positive picture but with a potential top reversal pattern -- a long-legged doji last week. We do not have a bearish confirming candle so the jury is out on this pattern. AA is trading above the rising 40-week moving average line.
The weekly OBV line shows us a two-year rise and the MACD oscillator is bullish.
In this daily Point and Figure chart of AA, below, we can see a potential upside price target now of $73.
In this weekly Point and Figure chart of AA, below, an upside target of $79 is being shown.
Bottom-line strategy: I have no special knowledge of what AA is going to report on Wednesday, but the charts and indicators favor further gains, everything being equal. Our nearest price targets are $73 and $79.
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