SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors that are underperforming in the short or long term, signaling where capital may be flowing toward better opportunities elsewhere. SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors that are underperforming in the short or long term, signaling where capital may be flowing toward better opportunities elsewhere. Last week, we highlighted the transportation name United Parcel Service Inc. (UPS). Today, we are going to highlight another transportation stock that has recently exhibited underperformance: Canadian National Railway Co. (CNR.TO).
The last time we reviewed CNR.TO was a little over a year ago, on June 25, 2024. At that time, we identified a breakdown in the stock after the shares peaked in March 2024 at approximately $180.00, with money flows rotating from the accumulation to the distribution phase. Since then, the shares have faced significant underperformance, with a -11.37% decline over the past month, -11.68% year to date, and –14.70% over the last year. This may not seem substantial, but in contrast, the TSX Composite Index Benchmark, TSX.I, has posted positive returns of +3.18% for the month, +12.26% year to date, and +24.90% over the past year. This represents an underperformance of 39.60% over the past year, almost exactly the time since we last commented on the name. One of the powerful aspects of SIA’s relative strength analysis is that it not only provides valuable insights on which investments are outperforming but also identifies those underperforming so that investors can avoid such names and look for better opportunities. Currently, the shares occupy the 211th spot out of 214 names in the SIA S&P/TSX Composite Index Report.
Looking at the attached candlestick chart, we see the shares peaked in March 2024 at the $180.00 level. Since then, a pattern of lower highs and lower lows has emerged, except for a brief relief rally in May 2025 before running into formidable resistance at the $150.00 area. A few weeks ago, there was a significant breakdown in support as the shares traded below the $130.00 level, which had been previous support in 2022 and earlier this year, leading to a new lower leg down. This new leg may not find its next support until the $120.00 level. As shown in the SIA Relative Strength Matrix Position chart, CNR.TO’s relative strength has consistently deteriorated, with the shares remaining in the Red Unfavored Zone of the SIA S&P/TSX Composite Index Report for most of 2024 and all of 2025 so far, demonstrating the power of SIA’s Relative Strength Analysis. With its current technical setup and continued underperformance, CNR could face more challenges ahead.
Delving into the Point and Figure Chart to identify more precise support and resistance points, we see that over the longer term, the shares were in a strong bull trend lasting almost four years, from April 2020 to March 2024. The longer-term trend then shifted to distribution mode, forming a consistent pattern of lower highs and lower lows. When the shares broke below $129.19, a lower low was established; this price point was significant because the shares had previously found long-term support there in June 2022. The next support is clustered in the $114.71 to $117.01 range. To the upside, if the shares can reverse, resistance lies at its 3-box reversal of $139.84 and, above that, at $154.39. However, with an SMAX score of 0 out of 10, there is no short-term strength whatsoever against the asset classes.
Also of note, the name is classified in the Transportation Sector, which ranks 21 out of 31 sectors in the SIA Market Sectors Report, and 42 out of 49 names in the Transportation Sector Report, signifying that CNR is one of the weaker names in a weaker sector.
Canadian National Railway Company, together with its subsidiaries, engages in rail, intermodal, trucking, and related transportation businesses in Canada and the United States.
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