Canadian National Railway Stock (CNR) Downgrade – Trade Opportunity For March 21 2016

Canadian National Railway Stock has been in my Canadian Portfolio for the past several years. It has been a solid performer and has provided excellent returns since I started trading it in March 2014. At that time Canadian National Railway Stock was trading above $62, after moving up from $60 where it had traded from November 2013. By May 2014 the stock had broken-out and quickly advanced to above $80.

Canadian National Railway Stock Trading Symbols

I trade this stock on the TSX Composite Index in Canadian dollars where it trades under the symbol CNR. It trades on the New York Stock Exchange under the symbol CNI. I trade it on the TSX in Canadian dollars.

Canadian National Railway Stock (CNR) 3 Year Chart

Looking at the 3 year chart the break-out in May 2014 is obvious. To that point I had been selling the $60 put strike. The break-out was sharp and pushed the stock quickly to above $80. You can see that the stock traded between $70 to $80 for the remainder of 2014.

At the start of 2015 the stock pushed to just above $88 and then began a decline.

Canadian National Railway Stock 3 Year Chart to Mar 20 2016

Canadian National Railway Stock 3 Year Chart to Mar 20 2016

Canadian National Railway Stock Decline

The decline in CNR Stock from the $88 high at the start of 2015 has been held by support at $70. You can see in the 12 month chart below that the stock has repeatedly tried to break through this support level without success. Each attempt to break through has resulted in Canadian National Railway Stock moving back up to just above the $80 level when momentum fades and the stock falls back.

Momentum in the latest rally is declining.

CNR Stock 12 Month Chart to Mar 18 2016

CNR Stock 12 Month Chart to Mar 18 2016

Canadian National Railway Stock 3 Month Chart

Looking at the 3 month chart for Canadian National Railway Stock you can see the intraday low back on Jan 21 at $66.62. The stock closed the next trading day at the $70 support level. From there the stock has rallied 23% to $82. Through much of the rally momentum has continued to decline although it has stayed positive.

The Slow Stochastic shows the stock as having been overbought for weeks and a down signal is still in place.

The pullback in February barely affected Canadian National Railway Stock. Instead of falling, it trended sideways for much of the February sell-off.

Canadian National Railway Stock 3 Month Chart to Mar 18 2016

Canadian National Railway Stock 3 Month Chart to Mar 18 2016

Downgrade Of Canadian National Railway Stock

This past week National Bank Financial (National Bank of Canada), downgraded the stock to sector perform from outperform market weight. They changed their price target to C$78 up $1.00 from $77.

Of the analysts that follow the stock 10 are not at hold on the stock while 7 still rate the stock a buy. There are no strong buy recommendations on the stock.

S&P Capital Rates CNI Stock A Buy

Meanwhile S&P Capital rates CNI Stock (US exchange) as a buy and on March 18 they gave the stock a 12 month price of $80 on the New York Stock Exchange. CNI stock closed down 85 cents on Friday at $62.07. A run to $80 would be a 28% gain.

Canadian National Railway Stock Trade Ideas

Whether the large number of hold ratings will affect Canadian National Railway Stock for the next month or two is difficult to predict. Instead the focus should be on the fact that the stock has held the $70 valuation through one of the worst sell-offs the market has seen in quite some time.

This advises that CNR Stock and CNI Stock are worth reviewing for portfolios. For myself I plan to trade the stock through a number of different trade strategies on the TSX Composite Index. I will be setting these up this week.

My trades will be focused on protecting my capital while aiming for decent returns for some short-term trades. Exact trade ideas details are for members but from the charts above investors can see why I will be placing trades this week and the potential for superior returns through trading Canadian National Railway Stock.

Canadian National Railway Stock Trade Ideas

FullyInformed Canada Members can review the latest Canadian National Railway Stock trade ideas directly through this link or they can sign in to the full members site here. Non-members can join here or read about the benefits of being a member.


Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.

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