For his final "Executive Decision" segment of Mad Money Tuesday evening, Jim Cramer checked in with Jim Squires, chairman and CEO of Norfolk Southern Corp. (NSC) , the railroad that posted a 16-cent-a-share earnings beat when it reported last week.
Squires said the Norfolk Southern has made a remarkable transformation over the years. When the railroad first started, 30% of their volume was coal, but now, the company transports the goods to support our consumer economy.
When asked how they've weathered the pandemic, Squires said after taking an initial hit, Norfolk Southern was able to move quickly to cut costs and increase productivity.
Let's check out the charts and indicators.
In the daily bar chart of NSC, below, we can see that prices have doubled from the March nadir. Prices are still in an uptrend but just a fraction above the now flat 50-day moving average line. The 200-day moving average line is still positive and intersects down around $208.
The On-Balance-Volume (OBV) line shows a rise from March but also a slight decline from early January suggesting a small shift from aggressive buying towards more aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator is pointed down and close to the zero line. We may see a sell signal in the days ahead.
In the weekly bar chart of NSC, below, we can see a mixed picture. Prices are still in a longer-term uptrend and are trading above the rising 40-week moving average line.
The weekly OBV line has been stalled since September suggesting a balance between buyers and sellers. The MACD oscillator has been "rolling over" the past few months and tells us that the strength of the uptrend is waning.
In this daily Point and Figure chart of NSC, below, we can see a price target of $274 being projected. A trade at $233 could start to weaken the picture.
In this weekly Point and Figure chart of NSC, below, the software is projecting a potential price target in the $347 area.
Bottom-line strategy: A general, broader market decline could drag NSC lower in the weeks ahead. With bullish Point and Figure charts (above) a pullback of modest proportions (think the $220 area) may turn out to be a buying opportunity. Be patient.
Norfolk Southern is a holding in TheStreet's Trifecta Stocks portfolio. Click here to learn more about this portfolio, trading ideas and market commentary product.
