In his Real Money Column " Work-From-Home Stocks Have Room to Run", Jim Cramer discusses how every time Covid-19 cases rise, the stay-at-home stocks rise right along with them. Cramer mentions that cardboard maker WestRock Inc. (WRK) , which was up 4% Thursday, has been part of this dynamic as the demand for container board got stronger.
We last looked at WRK on Aug. 24 and wrote that, "WRK has moved sideways for about five months. Prices are close to the apex of a triangle pattern and I find enough technical clues to favor an upside breakout. Traders could go long WRK at current levels and on strength above $31 risking a close below $28. $38 and $46 are the targets."
Prices have passed our first target of $38 so an update seems like a good idea now.
In the updated daily bar chart of WRK, below, we can see that since late August the shares have rallied above the declining 200-day moving average line. The 50-day moving average line has continued to rise and crossed above the 200-day line earlier this month for a bullish golden cross buy signal.
The On-Balance-Volume (OBV) line has continued to climb higher from its low in May, which tells us that buyers are still more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator remains bullish and pointed higher.
In the weekly bar chart of WRK, below, we can see that prices are trading above the bottoming 40-week moving average line. Prices are testing overhead resistance from late 2019-early 2020.
The weekly OBV line has been rising since May and that is constructive. The MACD oscillator on this longer time frame crossed to a buy signal in September.
In this daily Point and Figure chart of WRK, below, we can see a higher price target of around $53 now.
Bottom-line strategy: Continue to hold longs from previous recommendations. Our price targets are $46 and $53 now. Raise stop protection to a close below $34 now.
