Lately we have seen some of the biggest names slumping or just going sideways, and much of these stocks are big industrial names and transports. However, the rail group recently came alive lately with some decent earnings and now some rumor of takeovers. This time around it's again CSX, which bolted higher last Thursday on enormous turnover. This is the sort of action that gets us interested. Thursday 1/19 saw CSX rise on nearly 10x higher than normal volume. The stock gapped up and closed at the high of the session - clearly bullish.
Now, the time to expect some followthrough is the textbook definition - 4 to 7 days past the breakout. However, CSX buyers did not wait for that moment, instead pushing the stock higher this past Monday on good turnover. Rumor or not, buyers are rushing into the name, and now it appears this stock could be heading much higher. A series of higher lows has CSX into a 'fat tail' condition, and as we have seen in the past good relative strength tells us this condition could last into even higher prices (see the month circled).