Riding the Rails, Its a Hobo’s Life for Me!

• Posted by Greg Harmon
• on April 27th, 2011

Rail stock have been in eh news and doing well lately. They are important to many investors as rail traffic is an indicator is the strength of the economy. Three rail stock have reported earnings recently and now their stock prices look ready to move higher.

Kansas City Southern, ticker: $KSU

Kansas City Southern, KSU, broke out of a two month symmetrical triangle Tuesday and continued higher Wednesday, holding the breakout. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator are pointing to higher prices to come as are the expanding Bollinger bands (BB). The target on the breakout of the pattern is 64 and it has nearly cleared the last resistance at 57. Get your ticket for the move higher.

Norfolk Southern, ticker:$NSC

Norfolk Southern, NSC, bounced off of the rising 50 day Simple Moving Average (SMA) and has headed higher. It reported earnings after the close on Wednesday and had a last print 70.50 in the after hours session, extending higher. If that holds up in the regular session then it will have broken above the 70 resistance area from late March. This would create 2 targets on Measured Moves (MM) the first at 72 comparable to the move from mid March higher and then 76 comparable to the move from January through late March.The RSI rising and the MACD about to cross positive support this upside as well.

Union Pacific, ticker:$UNP

Union Pacific, UNP, broke through its resistance area at 99.27 on Tuesday and extended higher Wednesday after zig-zagging in a channel with a bottom around 92.50. the first target for the move higher is 106.25 for the channel break and then followed by 120 on a MM comparable to the move higher from September to January. Both the rising RSI and increasing MACD support more upside here as well.

So despite the recent downgrades to the economy and the joblessness, you see, it is gonna be the hobo’s life for me, riding the rails wherever they may take me. How about you?

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