Charts To Watch - Published Tuesday, March 19, 2013 11:30 AM ET

2 of the strongest TSX stocks over the last year have been the railroads, both CN and CP. Both of these stocks have a very strong following from international institutions. I have been concerned that if these stocks stated to show any sign of weakness, that would quickly spread across all sectors of the Canadian Stock Market.

The first to break down is CN.

So far, it is only short term investors that seem worried.

Daily Up Trend Line is broken.

New Right Side Sell Signal

More conservative investors will become agitated if we start closing below Mondays close.




CP has been the stronger of the two stocks, and is still holding up even after being hit with a series of Early Warning Signals.
 
 
A short term sell signal would be generated with a daily close below Monday's low.
 
 
More conservative money would start to exit with a daily close below 125.
 
We are a long way off from seeing Long Term Money move out of wither of these stocks.
 
For CP, we would need to see a Weekly Close below 113.50.
 
And for CN, we would need to see a Weekly Close below 96.25.
 
No matter what time frame you trade/invest in, I would strongly suggest that you consider locking in some profits up at these prices before we start to see any significant downside pressure, which is way overdue.
 
All for now.
 
Stephen Whiteside

 

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