The basic materials sector has been under pressure for the last four trading days and it is the worst performing sector of the 10 main sectors during that period. The Materials Select Sector SPDR ETF (NYSE: XLB) has dropped 1.94% over the last four days. Alcoa (NYSE: AA) is a member of the materials sector and it fell 4.78% on Thursday, February 28.
The sudden decline could be just the beginning for Alcoa as the stock hit the upper rail of a downward sloped trend channel that has defined the trend over the last 10 months. The upper rail connects the highs from last April and October and the lower rail connects the lows from June, July, and December.
We also see that the daily stochastic readings are in overbought territory and just made a bearish crossover. The 10-day RSI was in overbought territory as well and dropped after the selling on Thursday.
The Tickeron AI Trend Prediction tool generated a bearish signal on February 27 with the signal calling for a drop of at least 4% in the coming months. The prediction came with a confidence level of 71% and 71% of previous predictions have been successful.
Alcoa’s fundamentals may be part of the problem for the stock. Earnings have been flat over the last three years and the EPS dropped by 37% in the most recent quarter. Sales have grown by 11% per year over the last three years and they were up by 5% in the most recent quarter.
AA's Aroon Indicator triggered a bullish signal on April 23, 2024. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 211 similar instances where the Aroon Indicator showed a similar pattern. In of the 211 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
The Momentum Indicator moved above the 0 level on April 26, 2024. You may want to consider a long position or call options on AA as a result. In of 91 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The 50-day moving average for AA moved above the 200-day moving average on April 04, 2024. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AA advanced for three days, in of 278 cases, the price rose further within the following month. The odds of a continued upward trend are .
The 10-day RSI Indicator for AA moved out of overbought territory on April 10, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 28 similar instances where the indicator moved out of overbought territory. In of the 28 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The Moving Average Convergence Divergence Histogram (MACD) for AA turned negative on April 15, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
AA broke above its upper Bollinger Band on April 29, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.693) is normal, around the industry mean (2.283). AA has a moderately low P/E Ratio (0.000) as compared to the industry average of (23.652). Dividend Yield (0.011) settles around the average of (0.035) among similar stocks. P/S Ratio (0.641) is also within normal values, averaging (834.012).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a miner of bauxite and aluminum
Industry Aluminum