Management of railroad company Norfolk Southern ( NSC) are probably getting daily reminders on how to deal with the media due to the train derailment in Ohio. I am sure they would rather be out of the press limelight and just deal with "normal" business but they remain in the crosshairs of the news cycle.
Let's check on the condition of the charts and indicators to see if investors view the derailment news as temporary or something else.
In the daily bar chart of NSC, below, I can see that the shares have declined below the negatively sloped 50-day moving average line and below the weak 200-day line. The trading volume has increased the past seven weeks as interest in the company has increased.
The daily On-Balance-Volume (OBV) line shows weakness from early December in a shift to more aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator has weakened since early December and is now below the zero line in sell territory.
In the weekly Japanese candlestick chart of NSC, below, I see a weakening chart picture going back close to two years. Prices started to show weakness in early 2021. Now I see NSC trading the declining 40-week moving average line and the weekly OBV line showing weakness from the middle of 2021.
The weekly MACD oscillator has just crossed below the zero line for an outright sell signal.
In this daily Point and Figure chart of NSC, below, I can see a potential downside price target in the $201 area.
In this weekly Point and Figure chart of NSC, below, I see a downside price target in the $212 area.
Bottom-line strategy: The charts of NSC are pointed lower and it would be foolish to fight the tape. Avoid the long side of NSC and let the news play out.
