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Trading Ideas: IP

2011 - February 24, Thursday

Ok. Here’s a strategy that I want to share that’s simple and easy.

While going through myriads of charts of companies that I regularly monitor, I found International Paper (NYSE:IP).

Here’s the chart.

[2011.02.25] IP

The prices have been tested at least twice – depending on how you interpret it, it could have been 3 times – at the 27 level. Once we see bids going higher above the 50 MA at around the 28 level and if prices stay there, that’s the time to get in.

I tend to jump in early, so I would build my initial position on the intial break out and put a tight stop at around 27.90. There’s a tendency to be some selling pressure at the 29 level as historical prices have shown. I would accumulate at the 28 level after bouncing below the 29. If we do not sell off at the 29 level and break through, I would accumulate once again.

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On the other hand, if the 27 level support is broken. I would enter a small short position and follow through with the expectation drawn as orange arrows.

*note: Currently, I hold FFIV (entered today) and TLT.



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