Recently, Alcoa has broken above the $10 handle, an area that had been rather resistive in the past. The fact that we have broken above there is a very positive sign and as a result it looks as if the stock will continue to go higher. This area is clearly marked on the chart, with not only the red line but also the yellow rectangle. This is an area that should see plenty of support, as we draw back towards the $10 handle. That area should have plenty of buyers looking at this market as we have not only broken above the previous resistance, the 2 moving averages on the chart crossed previously as well.
The 50 day exponential moving average, marked in red, crossed above the 100 day exponential moving average, marked in blue. The circle shows that the momentum is most certainly shifting to the upside, so having said that it looks as if the buyers are starting to finally assert dominance in this market.
Alcoa forecast: higher prices
Looking at this chart, you can also see that we have recently made a higher high as we broke above the breakout that ultimately failed back in the fall of 2015. Because of this, looks as if we are trying to build up even more momentum, and if we can get some type of supportive candle in this general vicinity, Adrian and I are more than willing to go long. Pictured is the CFD chart, but quite frankly this is a stock that looks ready to go higher from the longer-term perspective. So if you do not have the ability to trade CFDs, using the actual stock will be the way to go as this seems to be a longer-term move waiting to happen. If that’s the case, you don’t have to worry about transaction costs and the like.
It is not until we break down below the $9.15 level that we feel that Alcoa will show significant weakness. This is a stock that has been absolutely brutalize over the last couple of years, and it now appears that people are starting to look at this as a potential value play for the longer term.