Watch The Railroad Tracks On PPG Industries (PPG)

Posted by barkand on November 7, 2011 under Classic chart patterns | Be the First to Comment

We have a chart today which illustrates a seldom-used chart pattern some like to call “railroad tracks”.

On the daily bar chart of PPG Industires (PPG) seen below, the two latest bars together produce a set of railroad tracks. Both bars cover roughly the same territory and close at roughly the same place. Proper railroad tracks should be reasonably long, as these are.   

This should be thought of as a “continuation pattern” in the sense that prices should continue moving in the direction of the closes. In this case, prices closed near the highs so we expect PPG to continue moving higher.

So long as we are looking at PPG, we would point out also that this boring industrial company has been strongly outperforming the S&P 500 since late September. The market had one of its best months ever in October and PPG did even better. The stock is now back to its pre-”Euro crisis” level in the high 80s.