The next six days could make or break it for International Paper's (NYSE:IP) stock. IP has enjoyed a great move higher year to date -- rising from a low of 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's the rub. Following consolidation, the price can either break to the up or downside. And you never know 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 International Paper's 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 support more upward movement. That's 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 drive the price higher.
Questions creep in, though, when you examine the strength of momentum. The RSI is currently pulling back and the MACD is about to cross down. That shows waning momentum, which could be a short term issue as all the other pieces support more upward price action.
You'll just have to wait and see. A break over resistance at 49.60 confirms the upside. A move under 48, a retreat.