Aluminum Stock in Rally Mode Before Earnings

Alcoa Corp (NYSE:AA) stock is in rally mode ahead of its first-quarter earnings report, which is due out after the market close on Wednesday, April 17. The security is up 5.1% at $36.98 at last check, after both the U.S. and Britain banned the Chicago Mercantile Exchange (CME) and London Metal Exchange (LME) from accepting new Russian aluminum and nickel.

While the $38 region has capped price action this month, the 20-day moving average has been a solid source of support since early March, and could remerge as such in the coming weeks. Shares also reached their highest level since May in the previous session, and have added more than 37% over the last 12 months.

It remains to be seen whether Alcoa stock can break its alarming streak of post-earnings losses. The equity finished six of its past eight next-day sessions lower, with five of those being consecutive. AA is averaged a move of 5.8% over the last two years, regardless of direction, but the options pits are pricing in a much bigger-than-usual swing of 9.1% this time around.

Options bears are firmly in control, per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.05 that ranks in the elevated 84th percentile of its annual range. This means short-term have been more popular than usual. Short interest also rose 21.4% in the last two reporting periods, and the 14.37 million shares sold short makes up 8.1% of Alcoa stock's available float.