Canadian National Railway Drops 3.36% To $102.88 Amid Technical Breakdown

Canadian National Railway (CNI) declined 3.36% to $102.88 in the latest session, marking a two-day cumulative drop of 3.49%, with the stock closing at its daily low on elevated volume of 1.78 million shares. This bearish momentum forms the backdrop for our technical assessment of the stock's current positioning.
Candlestick Theory
The recent daily candlestick on July 7th printed a decisive bearish marubozu, closing at its low point after testing resistance near $106.02. This follows a failed breakout attempt above the $106-$107 resistance zone that previously capped advances in early July. Critical support emerges at the psychological $100 level, which aligns with the February and May 2025 lows. A cluster of daily closes near $104.50-$105 also establishes minor support, though its breach suggests vulnerability to test lower thresholds.
Moving Average Theory
Short-term moving averages exhibit bearish alignment, with the 50-day SMA ($106.20) crossing below the 100-day SMA ($106.60), confirming negative momentum. The long-term 200-day SMA ($106.50) maintains a neutral slope overhead, creating a triple resistance confluence around $106.50-$106.60. Current price trading approximately 3.4% below these key averages signals persistent downside pressure, though the absence of a sharply declining 200-day SMA suggests the broader uptrend from 2024 lows isn't yet fully compromised.
MACD & KDJ Indicators
MACD lines remain submerged in negative territory, though the histogram shows diminishing bearish momentum as the price approaches key supports. KDJ oscillators (especially the %K and %D) reside near oversold thresholds after the recent selloff, with the %J line dipping below 20. This typically precedes short-term rebounds, though oversold conditions could persist in strong downtrends. Divergence between price making lower lows and KDJ showing higher lows suggests weakening downward acceleration.
Bollinger Bands
Volatility expanded significantly during the July 7th breakdown as price plunged through the lower Bollinger Band (approximately $104.50). This deviation typically triggers either continuation of bearish momentum or a mean-reversion bounce. The bandwidth expanded 38% from June’s consolidation, reflecting growing selling pressure. Recovery above the lower band is needed to signal stabilization.
Volume-Price Relationship
Distribution patterns dominate, with the highest recent volume (1.78M shares on July 7) accompanying the breakdown candle – confirming capitulation. Declining volume on recovery attempts throughout June and early July highlighted weakening demand. Any rebound will require volume expansion above the 10-day average (1.35M shares) to confirm accumulation.
Relative Strength Index (RSI)
The 14-day RSI (38.2) resides in neutral territory but shows nascent bullish divergence relative to price lows. While not yet oversold (sub-30), the indicator’s failure to breach 50 during June rallies underscored deteriorating momentum. Extended trade below 40 would reinforce bearish control, though current levels suggest limited immediate downside exhaustion.
Fibonacci Retracement
From the September 2024 high ($122.19) to the May 2025 low ($92.66), key Fibonacci levels frame the recovery. Recent rejection at the 61.8% retracement ($111.25) proved significant. Current price now tests the 50% retracement support ($102.50). A decisive break below may target the 38.2% level ($98.50), while holding this zone could reignite recovery attempts toward the 61.8% resistance.
Confluence and Probabilities
Multiple indicators align at $102.50-$100: the 50% Fibonacci level coincides with psychological support, the RSI divergence zone, and the lower Bollinger Band breach. A rebound from this area appears increasingly probable near-term, though would require volume-backed confirmation to overcome resistance around $104.50 (recent swing low) and $106.50 (moving average cluster). Bearish momentum dominance prevails below $102.50, potentially triggering extended declines toward $98.50. Divergences in RSI and KDJ against price warn of downside exhaustion risks, increasing sensitivity to positive catalyst-driven reversals.