Alcoa has been basing near a major support area since early February.  After suffering an ugly breakdown immediately following the January 17th earnings report AA began a steep pullback.  The stock dipped down to the $44.00 area in early February retracing a powerful rally leg that began on December 19th.  Alcoa has held this area at multi-week lows in March and, as an upward sloping 200 day moving average comes into play, is holding this week’s low as well. 

Trading notes:  At this week’s low AA is off 22% from the 2018 peak.

A divergent low(daily MACD)is now developing.

The $44.00 area has marked the February, March and April lows.

Despite yesterday’s selling wave AA did not violate last week’s low.

A close back below $43.00 would be a clear warning sign that a much more prolonged basing pattern will be needed before AA can return to rally mode.

A key upside hurdle is the $48.00 area.  A clear break through this level would take out an overhead trendline the links the January/March highs as well as the 50D mav.

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