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Alcoa (AA) Crossed Above the 20-Day Moving Average: What That Means for Investors

Zacks.com logo Zacks.com 4/15/2021

Alcoa (AA) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AA crossed above the 20-day moving average, suggesting a short-term bullish trend.

A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives more trend reversal signals than longer-term moving averages.

Similar to other SMAs, if a stock's price moves above the 20-day, the trend is considered positive, while price falling below the moving average can signal a downward trend.

Shares of AA have been moving higher over the past four weeks, up 5.8%. Plus, the company is currently a Zacks Rank #1 (Strong Buy) stock, suggesting that AA could be poised for a continued surge.

Once investors consider AA's positive earnings estimate revisions, the bullish case only solidifies. No earnings estimate has been lowered in the past two months, compared to 5 raised estimates, for the current fiscal year, and the consensus estimate has increased as well.

Investors should think about putting AA on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.

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