Norfolk Southern (NSC) was reviewed near the end of April, and I gave my two cents -- "The recent sharp run-up in prices could see some corrective price action -- either sideways or lower. Traders looking to go long NSC should wait for a dip to around $143-$142 before probing the long side. Risk below $138 looking for gains to the low $160s." Traders got that dip to buy earlier this month. NSC is now close to breaking above the January highs. Do we need to adjust the game plan? Let's check.
In this daily bar chart of NSC, below, we can see that prices are in a stronger technical position than just a few weeks ago. NSC is above the now rising 50-day simple moving average line. The slower-to-react 200-day moving average line is also pointed up and is last tested in late April. The daily On-Balance-Volume (OBV) line has been rising since early August and is close to establishing a new high for the move up. A new high for the OBV line will help promote the bull case for NSC. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish position rising above the zero line.
In this weekly bar chart of NSC, below, we can see that prices are above the rising 40-week moving average line. The 40-week average has been a good indicator the past two years. The weekly OBV line corrected from January to the beginning of April and has been turning up again the past five weeks. The weekly MACD oscillator is crossing to the upside now for an outright go long signal.
In this Point and Figure chart of NSC, below, we can see that prices are "within striking distance" of the $155.50 high back in January (look for the "1" on the chart). An upside price target of $163.53 is being projected.
Bottom line: NSC could "play chicken" for a while with respect to testing and breaking the January zenith. Longs could raise sell stops to below $144. $163 is our initial upside price target.