Ingersoll-Rand (IR) is surging on very heavy trade Friday. With an hour to go in the session, the diversified machinery company is up over 2.25% and is trading at new 2017 highs. This powerful breakout move is leaving behind a very solid base and is now set up well for more upside. As this week comes to a close, investors should place IR on their watch list.
Back in late April, IR ramped over 3.5% following its first-quarter earnings report. The news-fueled April 26 breakout was the stock's biggest gain of the year, but further upside was very limited. The stock was out of upside momentum as the month came to an end and by early May the stock entered consolidation mode. During this healthy rest, IR traced out a near-perfect bullish pennant. Friday, the stock has ended this pattern with convincing upside resolution.
In the near term, investors should take on a more positive view of IR. This A- rated stock is set up well for more upside with a solid support zone underneath and is a low risk buy near current levels. On the downside, a close back below $87.50 would violate the June low sending a clear warning sign that Friday's breakout has failed.
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