Norfolk Southern (NSC) has been in a four-month consolidation pattern with a positive On-Balance-Volume (OBV) line. With our other technical indicators in good shape it is only a matter of time before NSC breaks out of the roundhouse and heads higher.
In this daily bar chart of NSC, below, we can see how prices have climbed from just briefly below $80 to touch $125 only eight months later. The price trend has turned sideways and the 50-day moving average line has peaked and turned lower. The 200-day moving average line is still positive and comfortably below the market.
The daily On-Balance-Volume (OBV) line rose modestly until late October and then rose stronger confirming the bullish price trend. The Moving Average Convergence Divergence (MACD) oscillator moved back above the zero line at the end of April.
In this weekly chart of NSC, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line turned up in May 2016 but is neutral the past few months. The weekly MACD oscillator is in a take profits mode.
In this Point and Figure chart of NSC, below, we can see an important breakout at $97 and there will be another breakout when prices trade at $126. This big base formation can support a potential rally to $194.
Bottom line: Traders should consider going long NSC here and on a close above $120 risking a close below $113 and setting your sights on a move toward $200 in the months ahead.