Similar to the movement in other railroad stocks, Norfolk Southern (NSC) has rallied from its early February nadir but prices appear to have gotten extended in recent sessions and probably will not break out over its April highs, at least not for a while.
In this daily chart of NSC, above, we can see that the rally from $65 in early February to short of $95 by late April. The On-Balance-Volume (OBV) line moved up nicely in this period and continues to be pointed up, signaling aggressive buying. Prices are above the 50-day and the 200-day moving averages and we can see a golden cross of these averages in late April.
The rub on this chart is that NSC appears to have stopped short of breaking above its April highs, which can set the stage for a correction.
In this weekly chart of NSC, above, we can see that prices are above the rising 40-week moving average line. The biggest problem for the bulls could be the declining OBV line on this weekly time frame. The OBV line has been pointed down with prices from the peak and suggests that the rally this year is on shaky ground and could derail.