Trading Ideas by MarketHistory.com Burlington Northern Santa Fe Corp - Full Steam Ahead for Profits5/14/2009 | MarketHistory.com
By Robert Kolton
Burlington Northern Santa Fe Corp. (BNI) opened at the high of the day ($68.46) on Wednesday and continued to decline by a big 4.6% to close at $66.28. The stock experienced a Bearish MACD Crossover* as it is down by a very large 9.1% over the past five trading days. Trading below its 200 day moving average, what is next for Burlington Northern Santa Fe Corp.?
* A Bearish MACD Crossover occurs when the daily MACD (Moving Average Convergence Divergence) indicator crosses below the slower Signal line.
Q: How has Burlington Northern Santa Fe Corp. performed in the past after the stock experiences a very large five day decline in the second quarter, while trading below its 200 day moving average?
A: According to the 11 previous occurrences of this event, EventEdge indicates that BNI has shown a strong bullish edge that peaks 17 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Wednesday, 13 May 2009) is Monday, 8 June 2009.
BNI rallies in 91% of the cases (10 of 11) by an average of 9.5% relative to the close on the event date. The average of the 1 decline is -4.5%. The overall return of the 11 cases is 8.2%, which, based on the close of BNI on the event date ($66.28), provides a target price of $71.71.
Click here to view this idea in EventEdge.
