Alcoa stock has reversed back up again after finding support at the 46.75 level, which overlaps with the medium-term ascending trend line. The price remains above the 200-day simple moving average (SMA) suggesting further upside momentum.
The RSI has been rising in recent days, hinting to a change in short-term dynamics from bearish to bullish. Turning to the stochastics, they’re giving a bullish signal in the very short-term as the %K line has crossed above the slow %D one, with both lines heading higher. Furthermore, the MACD oscillator jumped above its trigger line in the negative area.
Should the index extend its gains, the area around the middle Bollinger line, a 20-day SMA at 50.39 and the 40-day SMA around 51.00 could offer significant resistance. Price action is currently taking place not far below these levels, and a run above them could challenge the 55.40 resistance hurdle.
On the downside, a break below the uptrend line could shift the medium-term bullish bias to bearish and prices could slip towards the next immediate support of 43.70. A drop below this area would reinforce the negative structure and open the way for the 40.00 psychological level.
Despite the short-term pullback, the medium-term picture remains clearly bullish. The stock has been holding in an uptrend since June 2017.
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