Alcoa stock (NYSE: AA) has jumped 8.5% in just the last one week and has surpassed $50 level, outperforming the S&P 500 which declined marginally in the last week. If you look at the change in the stock over the last ten days and one month, AA stock has increased (13% and 6.8%, respectively) and outperformed the broader market on both occasions. The recent increase in stock price was mainly after a Jefferies analyst upgraded Alcoa stock to “buy” from “hold” and boosted the price target from $52 to $60. Following the push for decarbonization, the outlook for aluminum has become more positive. Aluminum is a critical metal for decarbonization and will likely continue to see increased demand compared to steel given its lightness (aluminum is about one-third the weight of steel) and easy recyclability. The push for electric vehicles will also drive demand for aluminum as EVs contain 30% more aluminum compared to internal combustion engine vehicles. Additionally, Alcoa has decided to restart 35,000 tons of curtailed capacity at its Portland Aluminum joint venture in Australia next year onward. A revival of the long-struggling operation is another signal that aluminum’s massive rally is finally convincing producers to bring more capacity on line.
Now, is AA stock set to rise further or could we expect some correction? We believe that there is a 57% chance of a rise in AA stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last five years. See our analysis on AA Stock Chance of Rise.
Twenty-One Day: AA 6.8%, vs. S&P500 5.6%; Outperformed market
(34% likelihood event; 57% probability of rise over next 21 days)
- AA stock increased 6.8% the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 5.6%
- A change of 6.8% or more over twenty-one trading days is a 34% likelihood event, which has occurred 424 times out of 1255 in the last five years
- Of these 424 instances, the stock has seen a positive movement over the next twenty-one trading days on 240 occasions
- This points to a 57% probability for the stock rising over the next twenty-one trading days
Ten Day: AA 13%, vs. S&P500 1.7%; Outperformed market
(13% likelihood event; 62% probability of rise over next 10 days)
- AA stock increased 13% over the last ten trading days (two weeks), compared to a broader market (S&P500) rise of 1.7%
- A change of 13% or more over ten trading days is a 13% likelihood event, which has occurred 167 times out of 1266 in the last five years
- Of these 167 instances, the stock has seen a positive movement over the next ten trading days on 104 occasions
- This points to a 62% probability for the stock rising over the next ten trading days
Five Day: AA 8.5%, vs. S&P500 -0.3%; Outperformed market
(15% likelihood event; 56% probability of rise over next five days)
- AA stock increased 8.5% over a five-day trading period ending 11/12/2021, much higher compared to the broader market (S&P500) decline of 0.3%
- A change of 8.5% or more over five trading days (one week) is a 15% likelihood event, which has occurred 193 times out of 1271 in the last five years
- Of these 193 instances, the stock has seen a positive movement over the next five trading days on 108 occasions
- This points to a 56% probability for the stock rising over the next five trading days
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