How to Trade Alcoa After Russian Sanctions
Let's check out how the charts have done since our February 9 review.
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Aluminum manufacturer Alcoa AA is trading to the upside Monday on the heels of the U.S. and the U.K. imposing a ban on exchanges taking new Russian supplies of aluminum and nickel.
Let's check out how the charts have done since our February 9 review where we wrote that "Buyers of AA showed up in the $24 area in October and December. Patient investors should wait for a retest of the $24 area in the weeks ahead before purchasing. Risk $3 from entry. The $57 area is our Point and Figure price target."
In the daily bar chart of AA, below, I can see that prices dipped towards our buying zone in late February. Shares of AA rebounded in March and continued to post gains in April. AA now trades above the rising 50-day moving average line and the bottoming 200-day line.
The On-Balance-Volume (OBV) line shows improvement from December. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but it has narrowed in recent weeks.
In this weekly Japanese candlestick chart of AA, below, I see a positive picture. The shares have rallied above the bottoming 40-week moving average line.
The weekly OBV line has turned higher and the MACD oscillator is crossing above the zero line for an outright go long signal.
In this daily Point and Figure chart of AA, below, I can see a potential upside price target in the $64 area.
In this weekly Point and Figure chart of AA, below, I can see a price target in the $64 area just like the daily chart above.
Bottom-line strategy: AA looks like it is making a longer consolidation pattern than what we would have anticipated just a few days ago. Traders should be patient and stay long. Raise stops to the $32 area. The $64 area is my price target now.
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