Transport Stock Could Be a Buy

Union Pacific stock tends to outperform in April

by Patrick Martin

Published on Mar 28, 2018 at 12:27 PM

Union Pacific Corporation (NYSE:UNP) stock pulled back sharply after hitting a record high of $143.05 on Jan. 24, but found a firm foothold at its 100-day moving average, and has since taken a handful of bounces from here. At last check, UNP was up 0.4% to trade at $131.81, and could be headed even higher, if past is precedent. 

Daily UNP Chart

Per data from Schaeffer's Senior Quantitative Analyst Rocky White, UNP stock has been one of the best stocks to own on the S&P 500 Index (SPX) in April, looking back 10 years (and excluding stocks with fewer than eight returns). UNP shares have ended April higher 90% of the time, averaging a healthy monthly gain of 6.72%.

A continued round of short covering could also contribute to more gains for UNP. Short interest fell by 26% during the last reporting period, but it would still take nearly four days for the remaining bears to cover, at the average pace of trading.

Plus, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows UNP with a 10-day put/call volume ratio of 1.99, which ranks in the 87th percentile of its annual range. This means puts have been bought to open over calls at a quicker-than-usual clip, and could create tailwinds for the shares should some of the weaker bearish hands jump ship.

There are still plenty of analysts that remain skeptical of the security, too, with half of the brokerages covering UNP rating it tepid "hold." Should UNP stock once again rally in April, it could prompt analysts to upgrade the stock.


A Schaeffer's exclusive

TOP STOCK PICKS 2020

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Security Stock Targeting Terrorism
Click to continue to advertiser's site.
Earnings, China Deal Signing Guides Stocks to Fresh Highs
Traders were greeted with some M&A buzz, too
Twitter Stock Drops on Analyst Slam
TWTR has been attempting to recover from its fourth-quarter lows
The Security Stock Targeting Terrorism
Click to continue to advertiser's site.