Union Pacific Set to Chug Higher?

 | Aug 22, 2013 | 7:00 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

unp

I spy a symmetrical correction in Union Pacific (UNP) within a larger uptrend.  Now, I may only have the 200-day simple moving average on my side as far as the indicators that I like to watch on the daily chart, but I do have other key time and price parameters that are suggesting a look at this one on the buy side again.

 

Union Pacific (UNP)
Source: Dynamic Trader

 

First, if you take a look at the daily chart, you can see that I've illustrated two standout key support decisions. The first zone comes in at $153.94-154.49. The second zone comes in at $151.86-152.86. Both of these price cluster zones INCLUDE multiple 100% projections of prior declines, AKA symmetry projections. I have also illustrated the actual price of these prior swings on this same chart to show you how similar these swings can be. Besides the 100% projections, we also have some overlapping Fibonacci price retracements of prior swings and some price EXTENSIONS (essentially retracements beyond 100%).

Now, besides the price parameters, let's look at the time AXIS next. The first thing that stands out is that the last corrective decline lasted 22 trading days. The most recent decline into the Aug. 21 low has also lasted 22 trading days. That is what I call "symmetry in time." Symmetry is similarity or equality when comparing swings in the same direction. I have also labeled a few other swings in time on the chart that are similar. They were 23 trading days and 21 trading days. Besides the time symmetry, there are also OTHER overlapping time projections that come due between Aug. 21-26, with a focus on the cluster between Aug. 21-23. 

Bottom line, I am a buyer in UNP as long as we hold above key price support discussed above. (I typically use options strategies for my entries.) It's great if timing continues to match up with this, but not 100% necessary. If this setup plays out fully, my initial target comes in above the market at the $168.08 area. I will consider myself wrong the trade if the low end of the price support clusters are taken out on the downside. 

Columnist Conversations

Is this the biotech revolution or the biotech bust? View Small Cap Biotechs Like Never Before: Transparency is...
Lang:
Last year saw the MC NYSE oscillator hit -300 on about five occasions, and each time a massive bounce ensued. ...
If you are in the NYC area, Bob Lang and I will be in town this Monday and Tuesday night. We'd love to grab a ...
There are no signals in IWM....Still watching zone 2 in WYNN for a potential entry. The updated chart is below...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.