Alcoa shares got another boost from the company’s strong earnings report for the second quarter of the year, driving prices up by as much as 2.5% during the US trading session. A rising trend line can be drawn to connect the price dips while the 50 SMA (simple moving average) is also reflecting an uptrend.
MACD, however, is indicating that the trend is already exhausted and that buyers may need to regather strength. RSI is moving sideways, not giving any clear clues on the next direction of Alcoa shares.
Alcoa Shares Forecast
“Alcoa posted a profit of $138 million, or 12 cents a share, compared with a year-earlier loss of $119 million, or 11 cents a share. Excluding restructuring-related charges and other items, adjusted earnings rose to 18 cents a share from seven cents. Revenue edged down slightly to $5.84 billion.
The company last month took a big step toward reducing its dependence on low-margin basic materials with its $2.85 billion deal for jet-engine parts maker Firth Rixson Ltd. The planned acquisition represents a bet on continued rapid growth in the production of commercial jets and engines,” reported Marketwatch.
Moving forward, prospects are looking upbeat for Alcoa shares as these profits could help the company expand. “Our second-quarter results prove Alcoa’s transformation is in high gear, ” Chairman and Chief Executive Klaus Kleinfeld pointed out.
This marks the start of the earnings season for equity traders, as investors watch the largest companies in the US report whether or not they performed well in the previous quarter. Consistently strong earnings data could help boost risk sentiment and equity indices higher in the coming weeks while bleak figures could bring risk aversion back in the game.
Analysts are calling for more than 6% earnings growth from companies in the Standard & Poor’s 500 in the second quarter, says S&P Capital IQ.
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