IP’s Undercut-and-Reclaim Hammer: A Tactical Bounce Toward 46.5–47.0 Looks Likely Within 24 Hours

Executive snapshot

• Ticker: IP (International Paper)
• Current price: $45.88 (as of 2025-10-06 21:00 UTC)
• Session profile (Oct-06): Gap-down to $44.76, flushed to $44.15, then strong rebound to close near the high at $45.88 on elevated volume (~6.53M), printing a long lower-shadow hammer-like day.
• 24h view: Probable mean-reversion continuation toward $46.5–$47.2 if futures/tape remain stable, with $45.3–$45.5 expected to act as first intraday demand.

1. Price action and structure (multi-timeframe)

• Daily trend: Since late August, price has been in a mild descending channel from the $49–50 zone toward mid-45s. Today undercut the late-September double-bottom ($45.32 on Sep 25–26), tagged $44.15, and reclaimed the range. That’s a classic undercut-and-reclaim (Wyckoff “spring”) behavior, often followed by short-covering/mean reversion.
• Key levels:
  • Major support: $45.32 (Sep 25–26 double bottom), $44.15 (today’s spike low). Below that, $43.5 (S2 pivot) and $43.0 psychological.
  • Near-term resistance: $46.30 (20-DMA, also micro shelf), $46.52 (R1 pivot), $46.80–$47.20 (Fibo/near-term swing zone), $47.7–$48.1 (BB upper/Fibo 61.8%).
• Candle pattern (daily): Long lower wick hammer closing near high following a multi-week drift lower. This elevates odds of a 1–3 day countertrend bounce provided next day’s early dip is defended.
• Intraday (hourly, Oct-06): Progressive higher lows and higher highs from the morning low, with closing strength into the bell—momentum follow-through often carries into the next session’s open unless macro futures are risk-off.

2. Moving averages and trend gauges

• 20-day SMA: ~46.30 (estimate from last 20 closes). Price closed just below it (45.88), suggesting first overhead friction sits ~0.9% above.
• 50-day SMA: Sloping down; rough estimate high-47s to 48 given August highs and September drift. Price is below the 50-DMA, so the medium-term trend bias remains down, even if a short-term bounce is favored.
• 200-day SMA: Likely mid-to-high 40s; price is around/below it. Medium-term posture is neutral-to-bearish, but not deeply extended.
• Interpretation: Short-term mean reversion toward the 20-DMA is probable; 50-DMA/47–48 remains the bigger supply zone.

3. Momentum oscillators

• RSI(14): ~47 (computed). Neutral-bearish but lifting from mid-40s; room to push toward 50–55 on a bounce.
• Stochastic(14): Approximate %K ~30% with potential upward cross; typical of early bounce setups when paired with a hammer candle.
• MACD(12,26,9): Likely slightly negative and below signal on daily, but histogram flattening. On hourly, a bullish cross is implied by the late-session push. Taken together: short-term upside momentum building from a negative base.

4. Volatility and bands

• Bollinger Bands (20,2): Mid ~46.3; estimated lower band ~44.9 and upper ~47.7. Today pierced well below the lower band (low $44.15) and closed back inside—classic mean-reversion signal. First target area often is the mid-band (46.3); stretch target the upper band (47.7) if breadth cooperates.
• ATR(14): Roughly ~1.2–1.3. Today’s TR (1.83) expanded volatility. Expect 1–1.5 point intraday swings over the next session.

5. Volume, participation, and accumulation signals

• Volume: ~6.53M vs recent 20-day typical ~3.5–4.0M (est.)—~1.6–1.9x average. High-volume reclaim from an undercut often indicates responsive buyers and short covering.
• OBV (qualitative): Should uptick on today’s strong close; supportive for near-term follow-through.
• Volume spread analysis: Wide spread down-to-up reversal bar with strong close—a bullish effort-versus-result day.

6. Ichimoku lens (daily)

• Tenkan (9): ~46.3; Kijun (26): ~47.1 (est.). Price closed below both—system says downtrend, but distance from Kijun suggests snapback potential toward 46.3 first, possibly 47.1 on extension.
• Cloud: Likely above price; headwinds persist beyond 47–48. Near-term: reversion to Tenkan/Kijun is the higher-probability move.

7. Fibonacci mapping (recent swing)

• Swing: Sep 3 high ~$49.57 to Sep 26 low ~$45.32.
  • 38.2%: ~46.80
  • 50%: ~47.45
  • 61.8%: ~48.09
• Price was rejected near $47.17 (close to 50% zone) on Oct 3. Expect resistance band $46.8–$47.5 to cap the initial bounce. Thus, optimal profit targets should live just under that zone.

8. Classic pivots (using Oct-06 H/L/C = 45.975/44.15/45.88)

• Pivot (P) = 45.335
• R1 = 46.520
• R2 = 47.160
• R3 = 48.345
• S1 = 44.695
• S2 = 43.510
• Synthesis: A reasonable 24h path is P → R1 test (~46.5). Stretch → R2 (~47.16). The R1 aligns with 20-DMA neighborhood; R2 aligns with prior swing rejection.

9. VWAP and microstructure

• Today’s session VWAP (intraday estimate): ~45.60–45.70. Price closed slightly above, indicating late-day strength. Pullbacks toward VWAP on the next open are likely to attract dip buyers if the broader tape is not risk-off.

10. Pattern synthesis and probabilities

• Signals supporting a bounce over the next 24h:
  • Undercut-and-reclaim of the Sep double-bottom with hammer close near highs.
  • Close back inside lower Bollinger band after an outside pierce.
  • Elevated volume on reversal day.
  • Hourly structure displaying higher lows into the close.
• Headwinds capping upside:
  • Price still below 20/50-DMA with a declining 50-DMA—medium-term trend remains down.
  • Heavy supply overhead in $46.8–$47.5 (Fibo and prior rejection), and $47.7–$48.1 (upper band / 61.8% Fibo).
• 24h scenario probabilities (qualitative):
  • Bullish continuation to R1 (~46.5) with probes into 46.7–47.0: ~55%.
  • Range chop 45.3–46.5 (failed follow-through): ~35%.
  • Bear resumption breaking back below 45.3 and re-testing 44.7/44.2: ~10%.

11. Risk management framing (for context)

• Logical invalidation for a tactical long: sustained trade back below $45.30 (undercut without reclaim) or a swift failure below today’s VWAP cluster (~45.6) combined with weak tape—this would tilt odds back to 44.7–44.2.
• Reward-to-risk if buying 45.6, targeting 46.7–46.9 with a soft stop below 45.0 is attractive over 24h (R:R ~1.7–2.0:1).

Bottom line, next 24 hours

• Base case: Continuation bounce toward $46.5–$47.0, with first resistance at the 20-DMA/Pivot R1 (~46.5). Optimal tactical long is on a shallow pullback toward $45.5–$45.7 (near VWAP/late-day demand). Profit-taking favored just under $46.8–$47.0 given dense overhead supply and the still-declining 50-DMA.