International Paper Pulls Back from 28-month HighRecent months have seen a shift toward cyclical stocks like International Paper, which has some potentially bullish chart patterns.
First, IP spiked to $53.39 on January 6. That was the highest level since September 2018. Such a new high can indicate a stock is under accumulation – especially when it occurs so early in a calendar year.
Second, the materials company consistently hit resistance around $48 since November 2018. It stalled there again between January and April 2019 and again in December 2019 before the pandemic. However it broke that line in November and spent most of last month testing and holding it. Old resistance appears to be new support -- a potentially bullish pattern.
Finally, IP pulled back on Friday to hold its rising 50-day simple moving average (SMA).
Other trends beyond the chart may favor the former member of the Dow Jones Industrial Average. Materials have outperformed in the last six months as investors look for the global economy to rebound from coronavirus. Weighing in below $20 billion of market capitalization, IP is also the kind of non-FANG value stock many investors are now seeking. Finally, there could be strategic excitement as management spins off printing papers to focus on corrugated packaging.
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