- Posted by Greg Harmon
- on May 19th, 2014
The transports have been a powerful force over the last 6 months, continuing to make new highs. And within the sector the railroads are chugging along as they move higher. One, Union Pacific, $UNP, is carrying the fleet higher, blazing a new trail. But there are two railroads that are sitting on the edge of a break out, Kansas City Southern, $KSU, and Norfolk Southern, $NSC. They might just need some confidence to break higher. Come everyone, chant it with me. “I think I can, I think I can….”
Kansas City Southern gapped lower in January and made a double bottom in February. Since then it has been tightening against the resistance between 104.25 and 106. A break higher would look for a gap fill above 116. The momentum indicators RSI and MACD both support a move higher as well.
Norfolk Southern has not had a set back, but just a steady move higher that has turned into a consolidation between 93 and 98 since the beginning of March. Pressing on the top of the range again form a higher low, it has support to break through from a rising RSI and MACD. Both are bullish as well. This little engine could move $5 on the break higher.
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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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