Ingredion (INGR) is a top provider of food ingredients, like sweeteners and starches. It sells to the food, beverage, brewing and pharmaceutical industries, with a wholesaling operation instead of having name brand product lines that we might recognize. Despite this under the radar approach, the charts and indicators of INGR have gotten my attention.
Let's take a look at our usual array of charts and indicators to see what might be in store for this stock.
In this daily bar chart of INGR, above, we can see a sideways consolidation pattern with an upward bias since June. Some chart watchers might call the pattern of the last 12 months a saucer bottom, in that we can see lower price from November to February to June, followed by higher prices.
A possible neckline is seen around $126. Prices have crossed above and below the 50-day and 200-day moving averages, but they have spent more time above since June. The On-Balance-Volume (OBV) line has risen since June and suggests a new period of aggressive buying.
We can also see a period of aggressive buying from November to the end of March. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line most of the time since July.
In this weekly bar chart of INGR, above, we can see a beautiful-looking advance on the left side of the chart. The rising 40-week moving average line does a wonderful job in highlighting the trend. Since the middle of 2016, INGR has corrected to the downside and then traded sideways, with dips to around $115 being bought.
The weekly OBV line rises until the middle of 2016 and then it, too, moves sideways. Moving sideways tells us that buyers and sellers are in balance and that investors have largely stayed with their long positions. The weekly MACD oscillator gave a cover shorts buy signal in July and is now just above the zero line for an outright go long signal.
This Point and Figure chart of INGR, above, shows both the rally and the consolidation pattern. Rally to $126.18 on this chart will be a breakout or a double top breakout, if you please. The $140-$141 area would become the potential upside price target.
Bottom line: a one-year consolidation pattern can support a good rally once prices break out on the upside. Aggressive traders could go long INGR above $126 risking to $118 looking for gains to $140.