Aluminum stock Alcoa Corp (NYSE:AA) is surging to three-year highs today, last seen up 7.3% at $60.67. Up roughly 40% in the last month, the equity has recently caught the attention of investors. This rally could still have legs, too, as its recent peak comes amid historically low implied volatility (IV).
According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, there have been five instances in the past five years when AA traded within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with its current SVI of 45%, which sits low in the 13th percentile of its annual range.
AA was higher one month later 60% of the time after those signals, averaging an 8% gain. From its current perch, a similar move would place the shares at $65.71 -- their highest level since May 2022. Plus, in the event of a short-term pullback, underlying support at the 10-day moving average is also in place.
