CSX Corp. (CSX) has made a significant upside breakout. Let's check out the charts and indicators of this key transportation name to see where the tracks could be headed.
When we looked in on CSX back in November, we said, "if you are long CSX with a profit, I would look to protect those gains. A close below $50 is strike one. A close below $48 is strike two, and a close below $46 is strike three." CSX broke below $50 but twice it stopped short of $48 and last week it traveled up to a new high. Are its troubles behind it?
In this daily bar chart of CSX, below, we can see how prices have strengthened over the past three months. In February CSX broke below the rising 200-day moving average line but in early March and early April it successfully tested and held above the line. Two weeks ago the slope of the 50-day moving average line turned positive.
If you look back to early February you can see how the daily On-Balance-Volume (OBV) line turned up smartly and has made new highs recently. A rising OBV line tells us that buyers of CSX have become more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is now above the zero line and bullish.
In this weekly bar chart of CSX, below, we can see that prices are above the rising 40-week moving average line and the earlier tests and breaks of the 40-week line looks less bearish.
The weekly OBV line has been moving sideways the past year and needs to make a new high to confirm the price gains.
The weekly MACD oscillator has just turned up to a fresh go long signal.
In this Point and Figure chart of CSX, below, we can see the breakout at $59.82 and the upside price target of $75.37.
Bottom line: CSX has dipped to fill part of the upside gap so we can see that buyers are still interested (if buyers were not interested we would fill the entire gap). Aggressive traders could go long CSX here and on strength above $62 looking for gains to the mid-$70's. Risk below $56 for now.