Alcoa (NYSE:AA) has had a mixed time on the stock market in the first half of 2016 as its stock is in the red. The company started the year on the back foot due to the steep decline in commodity prices earlier in January, but over the past five months, it has made a remarkable recovery. In fact, Alcoa has gained more than 33% over the past five months, and going forward it is likely that the company will be able to sustain this momentum. Let's see why.
Stronger aluminum prices will drive Alcoa higher
A key reason why Alcoa shares have done well over the past few months is because of the rise in aluminum prices. As shown in the chart below, even though the price of aluminum has swung a bit wildly so far in 2016, but it is in a better state as compared to where it was at the end of 2015.
