The Moment of Truth for …… International Paper

• Posted by Greg Harmon
• on September 8th, 2016

Yes that is right. The next 6 days could make or break it for International Paper stock. Here is a company that has an up arrow in its logo. And it has enjoyed a great move higher in the stock price year to date. Rising from a low under 33 back to consolidation range and then breaking the range to the upside. It is now consolidating again at the Measured Move from the run higher.

And that is the rub. Following consolidation, the price can either break out to the upside or the downside. There is no magic to that. And you can not know for sure which it will be. But you can look at other indicators and build a mosaic as to which path might be easier to navigate. That comes from looking at the chart and options flow and open interest.

The chart above shows that consolidation at the Measured Move. It also shows that momentum is positive. The RSI is in the bullish zone and the MACD is positive, both supporting more upward movement. That is good news. The Bollinger Bands® are pointing higher and all of the SMA’s are rising and below the price. More good news. Options Expiry for September next week shows the biggest open interest at the 50 Strike on the Call side. That could draw price higher.

The questions creep in when looking at the strength of momentum. The RSI is currently pulling back and the MACD about to cross down. These show waning momentum. This could be a short term thing, as all the other pieces of the puzzle support more upward price action. You will just have to wait and see. A break over resistance at 49.60 confirms the upside. A move under 48 a retreat.

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