Alcoa Corp (NYSE:AA) stock is down 3.8% to trade at $38.78 at last check, looking to log its third-straight daily loss after its early July rally lost steam at the $43 mark. So far this week, AA has shed 8.3% and its pulling back towards its +10% year-over-year level. There’s a silver lining, however, as this drip puts Alcoa stock within a chip-shot of a historically bullish trendline.

Per Schaeffer’s Senior Quantitative Analyst Rocky White, the aluminum stock’s drawdown security put it within one standard deviation of its 80-day moving average. According to White’s data, the security saw four similar signals over the past three years and was higher after half of these occurrences, averaging a 9.1% one-month gain. A move of similar magnitude from AA’s current perch would put it above the $42 level.

AA Chart 2 July 102024

AA Chart 2 July 102024

An unwinding of short interest could push the equity even higher. Short interest added 2.4% in the last two reporting periods, and the 12.77 million shares sold short make up 7.2% of the stock’s available float.

A sentiment shift amongst the brokerage bunch could also add tailwinds. Of the 10 analysts in coverage, six rate Alcoa stock as a “hold” or worse.

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