Basic materials miner Arconic (ARNC) looks to keep rally going ahead of earnings

Basic materials stocks have been moving higher with the rest of the market since the Christmas Eve low. The Materials Select Sector SPDR (NYSE: XLB) has pretty much mirrored the rally by the S&P 500. While the sector has only matched the overall market, Arconic (NYSE: ARNC) has more than doubled the XLB and the S&P.

Since the December low, Arconic has rallied almost 60%. Over the last four months a trend channel has formed that seems to guiding the stock higher. The stock just hit the lower rail of the channel and jumped after it did.

The daily stochastic readings haven’t been in oversold territory since December, but they did drop down to their lowest levels since then in the past week. The indicators made a bullish crossover on July 24 and that could be a sign that the rally will resume.

The Tickeron Trend Prediction Engine generated a bullish signal for Arconic on July 22 and it showed a confidence level of 89%. Past predictions on the stock have been accurate 78% of the time. This signal calls for a gain of at least 4% within the next month. The company is scheduled to report earnings on August 2, so investors will be looking for the report to boost the stock. 

As far as the fundamentals, Arconic has seen decent earnings growth in recent years. The company has grown its EPS by an average of 26% per year over the last three years and earnings grew by 26% in the most recent quarter. Unfortunately the sales haven’t kept pace with the earnings and have only grown by an average of 5% per year over the last three years. 

Contributor

Harry Richardson|Expert

Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.