On Sept. 3, 2016 ($85.09), we reported a breakout and higher targets of $88 and $99 for Canadian National Railway (yesterday’s close $xx.xx). The stock then rallied to $108.64 (A) to fulfill and exceed our targets.
The stock then reversed the trend as it pulled back to $90.84 (B) below its 40-week moving average (40wMA) and below a falling trend-line (dashed line).
The subsequent rise above these indicators signalled the start of a new up-leg (C). The stock has since pulled back to its 40wMA, where it appears to have found support (D). Only a sustained decline below $104-105 would be negative.
A rise above $119-120 would signal the resumption of the up-trend and Point & Figure targets of $125 and $135.
Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: decisionplus.com