A positive earnings report and the announcement that Canadian National Railway’s (CNR.TO) embattled CEO is retiring by January has sparked renewed interest in the railroad’s shares. Yesterday they climbed 6 positions within the Yellow Neutral Zone of the SIA S&P/TSX 60 Index Report, finishing in 22nd place and snapped out of a recent relative strength downtrend.
A very bullish technical setup has emerged in Canadian National Railway (CNR.TO) shares. Back in September, the shares ended a consolidation phase with a breakout over the top of a $124.00 to $146.00 trading range. An initial rally ran out of gas near $160.00 and the shares fell back in a normal trading correction. This correction was contained by the 50-day moving average near $144.00, and since then, accumulation has resumed. Yesterday, the shares surged upward, starting off with a bullish breakaway gap to the upside, then blasting through $160.00 to a new all-time high, signaling the start of a new advance.
Based on measured moves from recent trading ranges, next potential upside resistance may appear near $168.00, $175.00, and $190.00, then the $200.00 round number. Initial support appears near $154.00, the bottom of yesterday’s gap.
For over a decade, Canadian National Railway (CNR.TO) shares have been steadily advancing in a step pattern of rallies followed by consolidation pauses at consistently higher levels. Back in September, the shares completed a bullish Triple Top breakout which ended an eleven-month consolidation phase. Yesterday, the shares broke out to a new all-time high, completing a bullish Double Top breakout, ending a brief correction and confirming the start of a new rally phase
Vertical and horizontal counts suggest potential upside resistance tests near $170.40, $191.90, and $207.70 on trend, along with the $200.00 round number. Initial support appears between $148.35 based on a 3-box reversal, and the $150.00 round number.
With a bullish SMAX score of 8, CNR.TO is exhibiting strength against the asset classes.
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