EarningsBeats.com Digest for March 11, 2022
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Canadian National Rail (CNI) is Back On Track!
Railroads ($DJUSRR) have been showing excellent relative strength in 2022, and just this past Monday, set a new all-time high. That type of market performance opens the door for a number of railroad companies. One that has been perhaps a bit of a laggard is Canadian National Rail (CNI). It's been bound in a $10 trading range between gap
resistance at $127 and price support at $117 for the past 3 months. On Thursday, however, we finally saw a breakout, at least above the short-term gap resistance:
CNI's price momentum is strengthening as its PPO is as strong as at any point in the past 3-4 months. CNI is also showing much better relative strength vs. its railroad peers and, on Thursday, closed at its highest relative strength level vs. the S&P 500 that it's seen in the past year. If there's one downside, it's been the slumping AD line. Personally, the AD line is a secondary indicator that I like to see confirm the price action.
In this case, it's not confirming the recent strength, but given the excellent performance of railroads in general, and CNI's breakout on Thursday, I expect to see CNI gaining further strength in the days and weeks ahead.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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