Don't Ignore This Chart

Alcoa Perks Up as CCI Breaks into Positive Territory

 | 

Alcoa is showing early signs of relative strength and momentum is improving as the Commodity Channel Index (CCI) breaks into positive territory for the first time since February. 2015 was clearly a rough year as the stock fell over 35% from January to August. The overall trend is down, but the stock is showing signs of a base with two lows at 8 and two bullish candlestick patterns. The two lows near eight form a potential double bottom that would be confirmed with a break above the intermittent high. The first low formed with a bullish engulfing and the second with a piercing pattern.  A gap up followed this piercing pattern and that gap is holding for the most part. The stock is getting a big lift this week with a break above the November high. Based on the mid November gap and last week's low, I would mark first support at 8.6. 

As of Tuesday's close, the S&P 500 was down around 2% month-to-date and Alcoa (AA) was up around 2%. With today's advance, AA broke above the November high and continues to show early signs of relative strength. The indicator window shows momentum improving with the Commodity Channel Index (CCI) breaking above zero and hitting its highest level of the year. Donald Lambert, creator of CCI, theorized that a surge above +100 could be used to signal the start of an uptrend. Similarly, a surge below -100 would signal the start of a downtrend. Looks like CCI is close to signaling the start of an uptrend for AA and this stock could go from 2015 dog to 2016 darling. 

Follow me on Twitter @arthurhill 
****************************************
Thanks for tuning in and have a good day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan
*****************************************

Enjoy this article? Hear more from Arthur Hill at

August 10th & 11th, 2018


See how the experts are protecting themselves from market volatility and reducing risk in uncharted waters

Join us online this August for two full days of investing insights, charting wisdom and market commentary from the industry's leading technicians. Streaming live wherever you are, you'll learn exactly how the experts are navigating the market's changing tides and remaining profitable in all conditions.

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart to be notified whenever a new post is added to this blog!
comments powered by Disqus