Riding the Rails

The railroad stocks have spent the better part of this year moving in horizontal consolidation patterns, but lately they look like they are preparing to break out of those ranges and move higher.

The weekly chart of Canadian National Rail (CNI) shows the stock price reverting around its 50-day moving average, within a wide channel since February of this year. In September, it bounced off channel support, recaptured its 50-day average, and began a strong run toward the channel top. In the process, the relative strength indicator crossed above its 21-period moving average and centerline, moving average convergence/divergence made a bullish crossover, and the money flow index (a volume-weighted measure of relative strength), crossed above its centerline. At this point in today's session, the stock has decisively broken above pattern resistance....254 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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