Eyeing Union Pacific for a Powerful Breakout

Shares of Union Pacific are on the edge of a new rally phase.
By Gary Morrow ,

Shares of Union Pacific (UNP) - Get Report are on the edge of a new rally phase. The stock is up just over 2.2% this morning as it extends the impressive post-Brexit rebound to nearly 10%.

This healthy run has lifted shares back up to a very important level. If Union Pacific can convincingly take out the $90 area, it could potentially run sharply higher.

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Back in mid-May, Union Pacific's steep pullback from its April peak began to find its footing. The stock spent the last half of May in a narrow range as it based just below the 200-day moving average. As the month came to a close, Union Pacific began to perk up, and by early June the stock was back in rally mode. A little over a week later, and after seven straight gains, UNP was retesting its April high but was once again turned away near the $90 area.

During the Bexit panic, UNP returned to a key support zone near the 200-day moving average and the May low. The stock quickly rebounded and has been moving steadily higher since. As the shortened holiday week comes to an end, UNP is about ready to break out. In the near term, UNP bulls should keep a close eye on the $90 area. A clear take out of this heavy resistance zone could spark a sharp move higher.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long UNP.

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