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  1. Home
  2. / Investing

International Paper Could Drift Lower in the Weeks Ahead

Let's round out the analysis with a look at the charts and indicators.
By BRUCE KAMICH
Mar 06, 2019 | 03:50 PM EST
Stocks quotes in this article: IP

In Tuesday night's Lightning Round of Jim Cramer's Mad Money program, Jim was positive on International Paper (IP)  : "It has a 4% yield and a good balance sheet."

But let's round out the analysis with a look at the charts and indicators.  

In this daily bar chart of IP, below, we can see that prices have been in a downtrend for most of the past 12 months. We can see lower highs starting back in June and lower lows to December.

While IP has not made a new low since December we can't say it is in a new uptrend and we cannot say that the rebound from December is all that impressive. Prices have been trading sideways between the declining 200-day moving average line and the slightly rising 50-day line.

The level of trading volume has been declining since October and the daily On-Balance-Volume (OBV) line has been in a downtrend from September - sellers of IP are still more aggressive than buyers.

The Moving Average Convergence Divergence (MACD) oscillator has been in a take profits sell mode from the beginning of February and is now close to the zero line, a possible future sell signal.  

In this weekly bar chart of IP, below, we can see that prices have been weak since early 2018. IP is below the declining 40-week moving average line.

The weekly OBV line has been in a decline as long as prices have been making lower lows.

The MACD oscillator has crossed to the upside for a cover shorts signal but a buy signal does not look imminent. 

In this Point and Figure chart of IP, below, there is still an upside target of $50 being indicated, but a dip to $44.83 is likely to turn the chart bearish. 

Insert chart 3 here 

Bottom line strategy: It looks like the rally in IP from late December has run out of steam. I would look for IP to slowly drift back down to the $42-$40 area in the weeks ahead.

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TAGS: Investing | Stocks | Technical Analysis | Trading | Paper/Forest Products

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Let's review the charts and indicators.

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