Good technical signals and a possible breakout for INGERSOLL-RAND INC.

INGERSOLL-RAND INC (NYSE:IR) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:IR.

Technical Analysis Observations

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

Overall IR gets a technical rating of 9 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, IR is showing a nice and steady performance.

• The short term is neutral, but the long term trend is still positive. Not much to worry about for now.
• When comparing the yearly performance of all stocks, we notice that IR is one of the better performing stocks in the market, outperforming 87% of all stocks. We also observe that the gains produced by IR over the past year are nicely spread over this period.
• IR is part of the Machinery industry. There are 148 other stocks in this industry. IR outperforms 87% of them.
• IR is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so IR is lagging the market slightly.
• In the last month IR has a been trading in the 56.90 - 62.64 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.

Why is NYSE:IR a setup?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:IR currently has a 8 as setup rating:

Besides having an excellent technical rating, IR also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 61.45. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for IR in the last couple of days, which is a good sign.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

More breakout setups can be found in our Breakout analyzer.