Norfolk Southern Corp. (NSC) has broken out over its January and June highs. NSC was reviewed in the middle of May, where I wrote that, "Barring a reversal to the downside it looks like NSC should soon break out on the upside. Steady as she goes." The breakout took awhile to happen but it is clearly here. Let's look at the charts and indicators.
In this daily bar chart of NSC, below, we can see last week's upside breakout. Prices are above the June highs, above the rising 50-day moving average line and the bullish 200-day line. Volume increased last week on the rally which tells us that traders are stepping up with confirming volume The daily On-Balance-Volume (OBV) line has been in a bullish trend from November and has made new highs for the move up telling us that buyers of NSC have been more aggressive for months. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration as it is above the zero line.
In this weekly bar chart of NSC we have a bullish alignment of all of our favorite indicators. We can see the new high made last week and that prices are above the rising 40-week moving average line. The weekly OBV line is bullish as is the MACD oscillator.
In this Point and Figure chart of NSC, below, we can see the breakout trade at $161.81 and an upside price target of $185.21.
Bottom line: Traders looking to get long NSC or add to longs should look to buy in the $170-$165 area. Risk below $155 for now while looking for initial gains to the $185 area.