JPMorgan: 'Very Large Supply Gap' Expected in Aluminum

JPMorgan's expectation of a significant supply deficit in aluminum could positively impact commodity prices and, consequently, the bank's commodity trading revenues. Technical indicators also support a short-term bullish trend for the stock: RSI is above 60, MACD is above its signal line, and the price is above both the 20-day and 50-day moving averages. However, as the change from the last close is limited, caution is warranted regarding the strength of the rally. Therefore, the direction is upward, with a medium level of confidence.

The news indicates that JPMorgan forecasts a significant supply deficit in aluminum, which could exert upward pressure on prices. Technical indicators present mixed signals: the RSI is neutral at 40.86, and the MACD is negative, yet the price remains above the 20- and 50-day moving averages. Despite a 0.5% decline in the last 24 hours, the supply deficit news may trigger a short-term recovery. However, the MACD being below its signal line and the RSI staying under 50 suggest that the upside could be limited. Therefore, while an upward move is expected, the confidence level is moderate.

The news signals a positive supply tightness for the aluminum sector, which could support AA shares. Technical indicators present a neutral-to-positive picture: RSI is balanced at 51.5, MACD is above the signal line, maintaining a short-term bullish trend. The price is above the 20-day SMA (62.84) but close to the 50-day SMA (63.16), indicating a resistance zone. Despite a slight decline of 0.22% in the last 24 hours, the positive expectations from the news could trigger upward movement in the short term. However, the market may need time to fully price in the news and break through resistance levels.