IP breaks below 50-day moving average for the first time since July 9th
International Paper Company (IP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IP finished the month -1.19% lower at 34.79 after losing $0.97 (-2.71%) today on high volume, notably underperforming the S&P 500 (0.77%).
Daily Candlestick Chart (IP as at Jul 31, 2020):
Friday's trading range has been $1.18 (3.34%), that's slightly above the last trading month's daily average range of $1.03. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IP.
After trading down to 34.35 earlier during the day, International Paper bounced off the key technical support level at 34.39 (S1). The failure to close below the support might increase that levels importance as support going forward. The stock closed below the 50-day moving average at 35.51 for the first time since July 9th. When this moving average was crossed below the last time on July 8th, IP lost -3.02% on the following trading day.
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Its common bearish interpretation has been confirmed for International Paper. Out of 76 times, IP closed lower 60.53% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 50.00% with an average market move of -0.11%.