Weyerhaueser Corp. (WY) broke out to the topside on Wednesday, continuing a rally that began in August. How much higher can WY climb? Do we want to participate? Let's check the latest charts and indicators.
In this daily bar chart of WY, below, we can see a November/December/January correction that ended last week. Prices began a steep rally above the flat 50-day moving average line. Prices have been above the rising 200-day line since early September.
The daily On-Balance-Volume (OBV) line turned up in September and has made a new high to confirm the price gains. A rising OBV line only happens when the trading volume is heavier on days when the stock closes higher -- a sign that buyers of the stock are being more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator turned back above the zero line the other day for a fresh outright go long signal.
In this weekly bar chart of WY, below, we can see how dips below the rising 40-week moving average line have been buying opportunities the past two years. The weekly OBV line has been strengthening the past five months and helps to confirm the rally. The weekly MACD oscillator is turning upward now for a new buy signal.
In this Point and Figure chart of WY, below, you can clearly see the pattern of higher highs and higher lows. A price target in the $42-$43 area is shown, but higher price targets are probably possible.
Bottom line -- WY has made a strong breakout and aggressive traders should consider becoming buyers on a dip towards $37, if available. Risk a close below $35.50 looking for initial gains to the low $40s.
