Union Pacific Is Rolling Off the Rails
Railroad firm Union Pacific (UNP) was downgraded to "hold" from "buy" at Loop Capital. Let's check out the charts and indicators to keep our strategy on track.
In this daily bar chart of UNP below, I can see that prices have worked lower on the chart since late February. UNP trades below the declining 50-day moving average line and below the cresting 200-day line. The On-Balance-Volume (OBV) line shows a downtrend since late December and tells me that sellers of UNP have been more aggressive than buyers for the past six months. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of UNP below, I see a weak setup. Prices have rolled over the past six months or so and now trade below the cresting 40-week moving average line. The OBV line has been slipping lower the past five months and represents the continuation of a longer-term decline. The MACD oscillator is pointed down and stands only slightly above the zero line.
In this daily Point and Figure chart of UNP below, I can see a downside price target in the $201 area.
In this weekly Point and Figure chart of UNP below, I can see a price target in the $202 area.
Bottom line strategy: Is the negative trend of the price of UNP telling us something about the U.S. economy? I don't know, but the charts of this logistic firm are likely to weaken further in the weeks ahead.
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