Packaging Corp Of America (NYSE: PKG)

Packaging Corporation of America manufactures and sells containerboard and corrugated packaging products primarily in the United States. The company’s Packaging segment offers various corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multi-color boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging. Its Paper segment manufactures and sells white papers comprising commodity and specialty papers with various features, such as colors, coatings, high brightness, and recycled content.

Take a look at the 1-year chart of Packaging (NYSE: PKG) below with added notations:

1-year chart of Packaging (NYSE: PKG)

PKG has been trading mostly sideways for the past few months. During that time, the stock has hit the same resistance at $120 (red) on multiple occasions. The stock is currently sitting just under that level now, and a solid close above the $120 should lead to another leg higher for PKG.

The Tale of the Tape: PKG has a 52-week resistance at $120. The possible long position on the stock would be on a breakout above that level with a stop placed under it.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT