CSX Corp. (CSX) is trading higher in Thursday's pre-market action following word that a nationwide freight railroad strike was averted with a tentative deal between labor and management, plus the announcement of former Ford Motor executive Joseph Hinrichs as the company's new CEO. Let's check out the charts and indicators of CSX to hear what they have to say.
In this daily bar chart of CSX, below, we can see some interesting chart developments. Prices declined to a low in July and then rebounded temporarily into August. Prices ran into selling around the declining 200-day moving average line. CSX has weakened in recent sessions to close below the 50-day moving average line and retraced about half the August advance. The On-Balance-Volume (OBV) line shows a decline from November and tells a story of months of more aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator has fallen below the zero line for a new outright sell signal.
In this weekly Japanese candlestick chart of CSX, below, we see a longer-term bearish picture. Prices have rolled over in a top pattern the past two years. Prices are below the declining 40-week moving average line. The weekly OBV line shows weakness from early 2021. The MACD oscillator is bearish.
In this daily Point and Figure chart of CSX, below, we can see a potential downside price target in the $19 area.
In this weekly Point and Figure chart of CSX, below, we see the same bearish price target of $19.
Bottom line strategy: Longer term, the new CEO is probably a positive for CSX, but higher labor costs and a weakening economy may be strong headwinds. The weekly candlestick chart looks like a large top pattern and further declines are possible. The long side of CSX is not appealing to me.
