Ingersoll-Rand (IR) has a promising looking chart (see below), but it still needs to rally over its 200-day moving average and break out over the November highs to warrant further gains.
Though IR did break below its early-October low in January and February of this year (see the chart, above), the dips below $50 lacked follow-through selling, and now with a little hindsight, it looks like accumulation -- or what chartists like to call buying. Prices have rallied above the 50-day moving average and the slope of this average is positive. One of the better ways to use moving averages is to trade in the direction of the average line -- for IR that would be up. Prices are testing the slower, 200-day moving average, and a close above the average line would be a positive development.
Also, in this chart we can see that the On-Balance-Volume (OBV) line has been up since early February, which tells us that buyers of IR have been more aggressive. Last, the trend-following Moving Average Convergence Divergence (MACD) oscillator in the lower panel is bullish and above the zero line.
This longer-term chart of IR, above, shows that the 40-week moving average line is being tested. The On-Balance-Volume (OBV) line is steady on this time frame and the MACD oscillator recently generated a "cover-shorts" buy signal with the crossover below the zero line. If IR can rally over its 200-day moving average and break above the chart resistance around $60, we would look for further gains into the $65 to $70 area in the weeks ahead. If prices retreat instead of going through the resistance, IR could eventually retest the support around $50.