Looking at the technical picture of the Alcoa Corp stock (NYSE: AA) on our daily chart, we can see that overall, the share price is trading well above its medium-term tentative upside support line taken from the low of October 29th. However, from the shorter-term perspective, after hitting the 44.41 barrier, which is now the current highest point of this year, the stock started drifting lower and forming lower highs. This allows us to draw a downside line from the high of May 10th, which continues to hold the price down. But at the same time AA is struggling to move and stay below the 34.93 hurdle, which is the lowest point of May. From the short-term perspective, we will stay bearish, but in order to get a bit more comfortable with that idea, we will wait for a daily close below that hurdle first.
If, eventually, the stock falls below the 34.93 zone, this will confirm a forthcoming lower low, potentially scaring off new buyers for a while. AA could then travel to the 32.55 area, marked near the lows of April 20th and 21st. Initially, the slide might take a pause there, but if there are still no new buyers around that price, the stock may drift further south by overcoming the 32.55 obstacle and then targeting the psychological 30.00 zone, marked by the lowest point of April.
The RSI is below 50 and points to the downside, indicating negative price momentum. The MACD, on the other hand, is currently pointing lower, while sitting fractionally above zero, but well below its trigger line. It seems that the MACD is more in favour of waiting for a price-drop below the 34.93 hurdle, before aiming lower.
Alternatively, if the stock breaks the aforementioned downside line and then climbs above the 38.76 barrier, marked by the high of June 10th, this could attract more buyers into the arena. If so, AA may rise to the current highest point of June, at 41.15, a break of which might set the stage for a push to the current highest point of this year, at 44.41.
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