The Canadian Technician

Getting Our Trading Back on the Rails

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The stock market has a pretty big slam lower to start the year. However, the massive rally off last week's lows will mean the monthly and quarterly data won't look nearly as bad.

  • January was down 5.2% from the December close to the January close.
  • February was down 3.1% from the January close to the February close.
  • March is up 2.7% from the February close to March month-to-date.

While those months sound minor both ways, it was the 35 trading days from the January highs to the February lows being down 14.7% that make it hard.

One group that held up well through the market correction was the railways. Here is CSX. Just a zoomed-out view, monthly price bars. This stock made new highs in March while the general market was recovering.

Here is NSC, Norfolk Southern. It has been consolidating, but still looks strong. This is the weakest chart of the publicly-traded railways.

UNP - Union Pacific Railway. This is a monster, blowing out to the top of the chart in March.

CN - Canadian National Railway. Another chart ready to blow through the top.

CP (Canadian Pacific Railway) recently acquired KSU. The stock is surging this month and is threatening the top of the chart.

Just leaving out all the details of the January to March move in the railway stocks, you would never know there was a difficult correction. It looks like a solid area to be enjoying higher highs as the industry narrows into a smaller oligopoly.

We continue to roll out new trading ideas as the market moves from down to up. If you would like to try the information at Osprey Strategic, head over to the home page and subscribe at OspreyStrategic.org.

Good trading,
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies


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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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