NEW YORK (TheStreet) -- Alcoa (AA) - Get Alcoa Corp. Report stock closed Friday as the top gainer in the S&P 500. The stock finished 6.2% higher on its strongest positive trade since May 1. This impressive move extended Alcoa's powerful upside reversal off Monday's low to over 17%.

The devastating bear trend that has been in place since early May is now showing signs of exhaustion. For Alcoa investors, a much-needed relief rally may be just beginning.

Shortly after Alcoa bolted more than 5% on May 1, the stock entered an ugly bear trend. By the end of the month, Alcoa was at new 2015 lows as a string of four straight lower monthly lows began. At last week's low, the stock had fallen over 40% from its May 1 high and was well below its 2014 low of $9.82. This relentless four-month selloff pushed the stock to its deepest weekly moving average convergence/divergence oversold reading since the 2011 bottom.

Alcoa's high-volume rebound from a deeply oversold setup should be viewed as a very positive sign for investors. If Alcoa can maintain the bulk of last week's gains this week, more upside is likely ahead.

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Alcoa has multiple layers of heavy overhead resistance to work through as a recovery move develops. The first challenge will be the July low at $9.59. Once past this level, a retest of the stock's 40-week moving average, currently at $11.05, would be within striking distance. A rally up to the 40-week would retrace 50% of the post-May 1 collapse.

As this rebound plays out, Alcoa bulls should consider the $8.70-to-$8.30 area as a low-risk buy zone. A close back below $7.50 would take out the 2013 lows and put a late August bottom in serious doubt.

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At the time of publication, author was long Alcoa.