The Engine That Could…
- Posted by Greg Harmon
- on March 4th, 2013
Transportation stocks started the latest leg of the markets moving higher. Railroads like Kansas City Southern, $KSU, Union Pacific, $UNP and Canadian National Rail, $CNI, have been the engines pulling everything higher. But not every railroad stock has been flying higher. One name has been left behind at the roundhouse. But if you get close enough you can just hear it whispering ‘I think I can, I think I can’, as it climbs to resistance.
CSX, $CSX, has traded in a long channel between 19.50 and 23 for over a year. Afraid to peek above the top. Not sure if it can break out. Monday it finally did break over that resistance and after a two month move higher off of the bottom of the channel. And with some momentum behind it, it just might be ready to scale that mountain up to the July 2011 peak. The Relative Strength Index (RSI) is bullish and moving higher with a Moving Average Convergence Divergence indicator (MACD) that is consolidating. The target on the break of the channel is a move to 26.50, even above the July high. Keep an eye on this for confirmation of the break out higher, or a failure. A continued move higher Tuesday leaves a tradeable stop around the breakout level.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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