At the December lows shares of Alcoa were off 60% from the 2018 highs driving the weekly MACD to oversold levels not seen since late 2009.  The stock had been working on its fourth straight lower monthly low and its 8th straight lower monthly high since leaving behind an ugly spike high back in April.  As January gets underway $AA is putting in a higher monthly low and is beginning to pierce the upper band of a three month bear channel.  A solid support zone is now in place.  In the near term patient investors should consider the stock a low risk buy between $29.00 and $27.00.  On the downside, a close back below $26.00 would drop $AA back into its bear channel signaling more basing is ahead.

Q4 earnings are due Jan. 16, after the bell.

At time of publication we are long $AA in some managed accounts.