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Alcoa Corp., Limited Price Increase Possible

1/10/2023 3:03 PM

Shares of Alcoa Corp., one of the world's largest aluminum producers, have risen for the fourth month, correcting as part of a long-term uptrend.

On Monday, quotes added more than 6.0%, reaching 50.60 amid the release of December data from the US labor market: the growth of average hourly wages decreased from 0.4% to 0.3% MoM and from 4.8% to 4.6% YoY, which may mean a decrease in fundamental factors that stimulate inflation, and push the US Federal Reserve to slow down the pace of monetary tightening. Additional support for securities was provided by opening China's external borders, which may stimulate the recovery of the Chinese economy and growth in demand for commodities, including aluminum.

Further positive dynamics of the issuer during the week remain in doubt: investors are likely to maintain a wait-and-see attitude until Thursday, when US inflation data for December is released, based on which regulator officials will make decisions on the further direction of monetary policy. Maintaining high indicator dynamics may force the agency to keep interest rate growth high, increasing pressure on the national economy. Also, soon, quotes may be negatively affected by a reduction in alumina production at Alcoa Inc. Kwinana plant in Western Australia, with a capacity of 2.2M tons per year. The approximately 30.0% decrease in output was due to a gas shortage at the facility caused by equipment failure at a Chevron Corp. plant in Wheatstone, whose management said they hoped to fix the problem in the coming days.

The trading instrument is testing 50.00 (Murrey level [8/8]), and if it consolidates above it, it will be able to continue growing to 53.12 (Murrey level [+1/8]) and 56.25 (Murrey level [+2/8]), and after the breakdown below 46.88 (Murrey level [7/8]), the decline will resume to 43.75 (Murrey level [6/8]), 40.62 (Murrey level [5/8]), 37.50 (Murrey level [4/8]).

Technical indicators reflect the continuation of the upward trend: Bollinger bands and Stochastic reverse upwards, while the MACD histogram grows in the positive zone.

Resistance levels: 50.00, 53.12, 56.25. | Support levels: 46.88, 43.75, 40.62, 37.50.

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