What will happen to Alcoa Stock?


The stock is down nearly 22% in the past month (about 21 trading days) and significantly underperformed the broader S&P 500, which fell about 9% over the same period. The big sell-off comes as aluminum prices come under pressure, falling from a high of about $3,700 per metric ton in early March 2022 and $2,850 in January, to about $2,250 currently as a steady rise in interest rates by central banks expected to increase will affect global growth and demand for industrial commodities. US GDP has also contracted in the last two consecutive quarters, while data from China’s industrial and real estate sectors has also not been encouraging, clouding the outlook for aluminum demand. In addition to lower raw material prices, Alcoa is also experiencing rising energy prices and higher input costs, which could hurt profitability.

Given that AA stock is down 22% in the past month, will AA stock continue its downward trajectory or is a recovery imminent? Judging by historical achievements, there is: a roughly equal chance of AA stock rising or falling in the next month. Out of 82 cases in the past six years that AA shares saw a twenty-one-day drop of 22% or more, 44 theirs resulted in an increase in the AA share during the next period of a month (twenty-one trading days). This historical pattern reflects 44 out of 82, or a 54% chance of AA stock rising in the next month. See our analysis on Alcoa Stock Chance of A Rise for more details.

Calculating ‘Event Probability’ and ‘Chance of Rise’ using data from the past six years

  • After moving 12% or more over a five-day period, the proportion rose in 53% of cases over the next five days.
  • After moving -17% or more over a 10-day period, the proportion increased in 47% of cases over the next 10 days.
  • After a movement of -22% or more over a twenty-one day period, the proportion increased in 54% of cases in the following twenty-one days.

This pattern suggests that the probability of AA stock rallying in the near term is not very high.

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