IP breaks below Thursday's low
International Paper Company (IP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IP finished the week 5.12% higher at 32.64 after edging lower $0.29 (-0.88%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 32.80, the market confirmed its breakout through the previous session low after trading up to $0.63 below it intraday.
Daily Candlestick Chart (IP as at May 22, 2020):
Friday's trading range has been $0.83 (2.52%), that's below the last trading month's daily average range of $1.27. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IP.
Prices are trading close to the key technical resistance level at 33.21 (R1).
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 33.65 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 31.70 where further sell stops could get triggered. As prices are trading close to May's high at 34.39, upside momentum might accelerate should International Paper mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for International Paper. Out of 399 times, IP closed higher 54.39% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 54.89% with an average market move of 0.60%.