Weyerhauser's Charts Looks Constructive

 | Oct 23, 2017 | 10:23 AM EDT
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Weyerhauser Co. (WY) had a great-looking chart before the announcement of the Potlatch (PCH) and Deltic Timber (DEL) tie-up, but maybe investors will bump up their views of WY in the wake of this deal. Let's check the charts of WY to see how they look.

In this daily bar chart of WY, below, we can see that prices are trying to break through the April highs. Prices are -- and have been for the past two months -- above the rising 50-day and 200-day moving average lines. The On-Balance-Volume (OBV) line has been rising from the July low and the August low. The OBV line has broken above the highs of June-September and suggests that buyers of WY have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish mode well above the zero line.

In this weekly chart of WY, below, we can see that prices are up sharply from their February 2016 nadir around $22. Prices are above the rising 40-week moving average line and poised to make new highs for the move up. The weekly OBV line has made lower highs since the first quarter of 2016, but has improved in the past three months. The weekly MACD oscillator is above the zero line and rising, giving us an outright go-long signal.

In this Point and Figure chart of WY, below, we can see the recent upside breakout at $34.96. A potential upside price target of $43.79 is projected.

Bottom line: It looks like WY is headed higher. Aggressive traders could try to buy available weakness in WY towards $34.50, risking below $33.50. Now, $44.00 is our upside price target.

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