Packaging Corp. of America (PKG) , a producer of containerboard, corrugated packaging products, reported disappointing earnings and revenue numbers Monday evening. Let's check the condition of the charts and indicators the Illinois-based company.
In the daily bar chart of PKG, below, I can see a basing pattern. The shares have moved sideways since June but with a low (call it a "head") in September/October. The slopes of the 50-day and 200-day moving average lines are positive. An anticipated lower opening Tuesday should test and perhaps break the 50-day line.
The trading volume has been roughly increasing since September. The On-Balance-Volume (OBV) line made a low in October and a slightly lower low in March. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but it has narrowed towards a possible downside crossover.
In the weekly Japanese candlestick chart of PKG, below, I see a positive picture. The most recent weekly candle pattern is a spinning top (small real body) representing a balance between bulls and bears and could be part of a top reversal pattern. The shares are trading above the rising 40-week moving average line.
The weekly OBV line shows strength from September. The weekly MACD oscillator is bullish.
In the daily Point and Figure chart of PKG, below, I can see the price action through Monday's close. As of Monday night the software projected an upside price target in the $175 area. PKG is trading lower Tuesday but that may not turn this chart bearish. Stay tuned.
In this weekly Point and Figure chart of PKG, below, I can see an upside price target in the $181 area.
Bottom-line strategy: PKG shares are trading lower Tuesday but if the shares do not break below the 200-day moving average line around $133 this pullback may turn out to be a buying opportunity. It is too soon to know for sure so keep your powder dry for now.
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