Union Pacific (UNP) made a strong turn around in January and has tracked higher all calendar year. However, rising prices without expanding volume is inherently weak so investors should look both ways before crossing and going long here.
In this one-year daily bar chart of UNP, below, we can see that "trend-wise" UNP is bullish. Prices are above the rising 50-day and 200-day moving averages. We can see a bullish golden cross of these averages in early June. But trend is just part of our overall analysis.
Whether we draw an uptrend line from the January low connecting the subsequent lows or we use a moving average line, either way we can see that the rallies from the trend line (not drawn) or the moving average line had been weakening. It is not unusual to the see rallies that are strong off of an important low but weaker rallies as a rally matures are sometimes a warning of a pending reversal.
In the middle panel is the On-Balance-Volume (OBV) line. This indicator has been around since the early 1960s and can give us a easier way to understand what volume is doing. The OBV line has only shown a slight improvement this year and suggests that buyers had been very restrained and not aggressive in their purchases. The Moving Average Convergence Divergence (MACD) oscillator is still above the zero line but it is pointed down and just triggered a liquidate longs sell signal.
In this three-year weekly chart of UNP, below, we get some different signals. Prices are above the rising 40-week moving average line. The OBV line on this timeframe looks more positive than the daily chart. The 12-week momentum study shows a bearish divergence between the higher price highs in April and August and weaker momentum readings over the same timeframe. Round numbers like $100 or 10,000, for example, can act as support or resistance and UNP is just below the century mark.
Things are still pointed up, but a close below $94 could start to derail the uptrend and a close below $91 could do more damage.