Nature

Alcoa shares become very oversold


IDuring Friday’s session, shares of Alcoa Corporation (ticker: AA) entered oversold territory, changing hands as low as $66.72 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered oversold if the RSI reading falls below 30.

In the case of Alcoa Corporation, the RSI reached 29.9 – in comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 43.1, Spot Gold’s RSI is at 42 .6 and Spot Silver’s RSI is currently 40.1. A bullish investor might take the AA reading of 29.9 as a sign that the recent selloff is running out, and start looking for entry point opportunities on the buy side.

Looking at a one-year performance chart (below), AA’s low point in its 52-week range is $30.995 per share, with $98.09 as its 52-week high – compare with a last transaction of $67.83. Shares of Alcoa Corporation are currently trading down around 6.1% on the day.

Click here to find out what 9 other oversold metal stocks you need to know »

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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