Conclusion, Investment Implications, Strategy

Weyerhaeuser Company (WY) appears to be resuming its July 2020 major uptrend amid quarterly relative performance versus the benchmark S&P 500 (SPX).  A sustained rise above the $33.56 area would help confirm this and target an additional 16% rise to $41.00 per share.  This is an Asbury Momentum trade idea.

Analysis and Rationale

Weyerhaeuser Company (WY), one of the world’s largest private owners of timberlands, began operations in 1900. They own or control approximately 11 million acres of timberlands in the U.S. and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. They are also one of the largest manufacturers of wood products in North America. WY is a real estate investment trust. In 2020, it generated $7.5 billion in net sales and employed approximately 9,400 people who serve customers worldwide.

The upper panel of Chart 1 below plots WY daily since October 2020 along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel displays a corresponding daily relative performance chart of WY versus the benchmark S&P 500 (SPX, blue) along with its 63-day moving average (green, quarterly, our Strategic time period).

Chart 1

The rightmost green highlights in the upper panel show that WY appears to be resuming its July 2020 major uptrend, as defined by its 200-day MA, following three successful tests of the 50-day MA on Jan 14th,  Feb 1st, and Feb 18th.  Meanwhile, WY’s current trend of quarterly relative outperformance versus SPX as shown in the lower panel also appears to be resuming following consecutive tests of it on those same dates.  A sustained rise above the 50-day MA, currently situated at $33.56, would help to confirm this and would target an additional 16% rise to $41.00 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $33.58 area, a long entry price of $35.35 would provide a 1:3.2 risk/reward ratio (risking $1.00 to make $3.20) with an initial risk of 5.0%.

Table 1

Click Here for a table containing all of our current stock, ETF and index ideas.

Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.