Railroad stocks are right on track
While the overall market struggles, these shares are ripe for new buying.
- The relative performance, or RS, broke through resistance, line b, in April before pulling back to test the longer-term uptrend, line c
- The RS has been making new highs over the past month, reflecting the group’s better relative performance than the S&P 500
- The weekly on-balance volume (OBV) has also turned up from its long-term uptrend, line d, and is back above its weighted moving average (WMA). The daily OBV (not shown) is also positive
- Once above the all-time highs at 734, the next upside targets are in the 750 area, or about 6% above current levels
- Once above the recent highs at $104.77, the next Fibonacci targets are in the $107.20 area. The weekly Starc+ band and the next upside targets are in the $109-$110 area
- The RS analysis confirmed the upside breakout, as its resistance, line f, was also overcome. The RS has formed higher lows, line g
- Volume was also good in late April and early May, as the downtrend in the OBV, line h, was overcome
- There is additional support for UNP in the $96-$97 area with the March lows at $90.66
- This also corresponds to the 38.2% retracement support with the 50% level at $67.80
- The RS made new highs last week and is well above the breakout level from May. The long-term uptrend in the RS (line d) is positive
- The daily OBV is still well below its resistance at line e, but it has moved back above its weighted moving average. The weekly volume (not shown) did confirm the April highs and is above its WMA.
- On a close above $72.60, the next chart and Fibonacci targets are in the $76.50-$77 area
- The low for CSX last summer was at $15.58, so the 38.2% retracement support is at $22.50
- The RS has just broken out to the upside, as the resistance, line h, has been overcome. The uptrend in the RS (line i) goes back to last summer’s lows
- The daily OBV has turned up from its support, line k, but it is still below its weighted moving average and resistance at line i
- The weekly OBV (not shown) did confirm the price highs in April
- The resistance is now strong in the $26.40-$26.80 area with the 127.2% retracement target at $27.60, which also corresponds to the weekly Starc+ band
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Stocks are facing some serious resistance as the bears tear into the market's respite.
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