Wait for a Dip in International Paper Before Going Long

Let's review the charts and indicators.
Stocks quotes in this article: WRK, IP

Jim Cramer focused on industrial names this morning (Monday) and pointed out that the papers represented by WestRock (WRK) and International Paper (IP) look good, too. We wrote about WRK on September 16 so let's check out IP today.

In this daily bar chart of IP, below, we can see that prices broke out above the 200-day moving average line in early September. The rally has accelerated in recent weeks and is challenging the highs of December. Prices are above the rising 50-day moving average line which crossed above the 200-day moving average line last month for a bullish golden cross signal. The slope of the 200-day line is still negative but it has begun to bottom.

The On-Balance-Volume (OBV) line has been rising and has already broken above its December peak telling us that buyers of IP have been more aggressive.

The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.  

 
In this weekly bar chart of IP, below, we can see that prices have broken a longer-term downtrend. IP is trading above the bottoming 40-week moving average line.
 
The weekly OBV line has only shown a slight improvement since March and that is not what I would like to see.
 
The weekly MACD oscillator moved above the zero line last month for an outright buy signal.  
 
 
 
In this daily Point and Figure chart of IP, below, we can see a positive looking chart with a nearby price target of $47. 
 
 
 
In this weekly close only Point and Figure chart of IP, below, we can see a potential longer-term price target of $70. 
 
 
Bottom line strategy: IP has climbed a lot since early September so I would await for a pullback to around $44 before going long. Risk below $40 and look for longer-term gains to the $70 area. 
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TAGS: Investing | Stocks | Technical Analysis | Trading | Paper/Forest Products | Real Money

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