Ingersoll-Rand (IR) recently broke out on the upside from a four-month triangle formation. What price targets might the charts reveal and where should we raise our sell stops?
Let's look at the charts together.
In this daily chart of IR, above, we can see the positive price action of the past year. IR has crisscrossed above and the below the 50-day moving average line since May but it looks like the slope of the line is turning positive again. IR has been above the positively sloped 200-day line since May and dips toward that line have been buying opportunities.
The On-Balance-Volume (OBV) line has risen with the price action from the January low. A rising OBV line means that buyers are being more aggressive than sellers and this action helps to confirm the price trend. Looking at the 12-momentum study, we find no bearish divergences to make us hesitant about buying strength.
In this three-year weekly chart of IR, above, we can see a big decline for IR and the big recovery. The upside breakout from the six-month consolidation pattern can be clearly seen. Prices are above the rising 40-week moving average line. The weekly OBV line has been improving along with prices from an early 2016 low.
In the lower panel is the trend-following Moving Average Convergence Divergence (MACD) oscillator and it is crossing to a new go long signal.
We have included this Point and Figure chart of IR, above, because it gives us a longer-term price target of $85. Not bad.
How about our trailing sell-stop? Short-term traders might risk a close below $65 and longer-term traders might risk a close below $62.