- 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 since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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