Every month we get mostly bullish information about the booming housing market. What about lumber companies? Shouldn't they be doing great? Let's check out the charts of PotlatchDeltic (PCH) .
In this daily bar chart of PCH, below, we can see how prices were cut in half back in February/March but have since doubled from their March nadir. PCH is trading above the rising 50-day moving average line and the rising 200-day line. We can see a bullish golden cross of these two indicators back in early August.
The On-Balance-Volume (OBV) line has been strong since bottoming in February/March. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned bullish in late November.
In this weekly bar chart of PCH, below, we can see that prices are now in a position to challenge the highs of late 2017 and early 2018. Prices are trading above the rising 40-week moving average line.
The weekly OBV line is bullish and did not decline in 2018 and 2019 when prices weakened. The MACD oscillator is in a bullish alignment above the zero line.
In this Point and Figure chart of PCH, below, we used weekly close only data to construct the X's and O's. A potential $78 price target is being projected.
Bottom line strategy: Aggressive traders could look to go long PCH on a pullback to $48 risking to $3. The $78 area is our price target.
