Start of a recovery for this share?

TL;DR

Alcoa presents a low-risk opportunity for a potential bull run in the aluminum market, with a possible rally up to $30.

Transcript

hello it's John Burford with chart of the week for Monday the 28th of October and today I'm covering Alcoa which is a major aluminum producer us-based of course and I believe I found another one of my buy low sell high opportunities and of course the the price of the shares is very much tied to the price market price of aluminium and this is the da... Read More

Key Insights

• 🤘 The price of Alcoa shares is closely tied to the market price of aluminum, making it important to analyze the metal's chart for potential opportunities.
• 📈 The daily chart suggests the formation of a bullish wedge or ending diagonal pattern, indicating a potential low-risk opportunity in Alcoa shares.
• 🍉 The long-term consolidation zone on the monthly chart, along with the potential Head & Shoulders reversal pattern, supports the idea of a rally phase in Alcoa shares.

Questions & Answers

Q: What is the basis for the potential bullish opportunity in Alcoa shares?

The analysis of the daily chart suggests the presence of a bull run opportunity due to the formation of a bullish wedge or ending diagonal pattern in the price of aluminum, which is closely linked to Alcoa shares.

Q: How does the monthly chart support the idea of a rally phase in Alcoa shares?

The monthly chart indicates a long-term consolidation zone for Alcoa shares, with strong support at the $20 to $22 range. This suggests a base for a potential rally phase, especially considering the historical pattern of price movements.

Q: What is the significance of the potential Head & Shoulders reversal pattern on the monthly chart?

The presence of a potential Head & Shoulders reversal pattern indicates a possible trend reversal in Alcoa shares. If the neckline in the $22.50 region is successfully tested, it could lead to a substantial rally phase, with a target of around $30.

Q: What is the risk/reward situation for investing in Alcoa shares?

The risk/reward situation for Alcoa shares appears favorable, with a potential reward of $30 per share and a suggested exit point at the $21 level. This represents a $9 potential gain compared to the potential risk.

Summary & Key Takeaways

• The daily chart shows a potential bullish wedge or ending diagonal in the price of aluminum, indicating a low-risk opportunity for Alcoa shares.

• The monthly chart displays a long-term consolidation pattern, with strong support at the $20 to $22 range, suggesting a base for a rally phase.

• The presence of a potential Head & Shoulders reversal pattern on the monthly chart implies the possibility of a move up in Alcoa shares.