NEW YORK (TheStreet) -- Shares of Alcoa (AA) - Get Report have been collapsing over the last eight weeks. At Monday's low of $10.92, the stock was down over 23% from its May 1 peak of $14.29. The steady drift lower has pushed Alcoa deep into new 2015 low territory. With earnings just ahead, the stock has now reached a major support zone near $11. If Alcoa can finally manage to form a base here and provide investors with some better news with Wednesday's earnings report, the potential for a powerful rally is strong.

Alcoa's current downtrend began shortly after a powerful upgrade-inspired breakout completely failed. On May 1, the stock surged almost 5.5% after Standpoint upgraded the stock to buy, which was its biggest single-day gain since last October. An ugly breakdown gap left behind on March 9 was filled during that bullish session.

This heavy resistance area held firm, marking a significant turning point. Alcoa began to give back the gains the next day and was unable to attract fresh buyers despite retesting key support. Two weeks later, the stock closed at fresh monthly lows, putting the May 1 buyers in a tight spot.

In the aftermath of the failed May 1 breakout, Alcoa has been tracing out a narrow and steep bearish channel. In June, shortly after the stock put in new 2015 lows, it suffered a nine-day losing streak. The selloff continued through the end of the month, but the stock remained well above the oversold moving average convergence-divergence reading that it reached in late March.

The potential for a divergent bottom in this indicator as major support near $11 is reached should provide bullish Alcoa investors with a certain degree of confidence. Alcoa bulls should consider the $11 area as a low-risk entry zone.

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This article is commentary by an independent contributor. At the time of publication, the author was long AA.