Canadian Pacific Stock Chugs Higher; Fresh Base Nearly Done

If you’re looking for the stock of  a big, stable company that’s nearing completion of a strong base, one prospect to check out is Canadian Pacific Railway (CP). On Thursday, the Relative Strength Rating for Canadian Pacific stock climbed to 77, up from 70 earlier.

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Additionally, Canadian Pacific Railway is working on a double-bottom base with an 82.91 entry. See if it can break out in heavy trading. It’s a well-formed pattern, with the second leg down a little lower than the first leg, a bullish indicator, as shown on a MarketSmith daily and weekly chart.

Canadian Pacific Stock Poised For Further Gains

The 77 RS Rating means that Canadian Pacific stock is outperforming 77% of stocks. There are no guarantees that a stock will go higher, of course. But stocks that go on to make the biggest gains often have an RS Rating above 80 in the early stages of their moves. See if Canadian Pacific Railway can continue to show renewed price strength and hit that benchmark.

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Among its other key ratings, Calgary-based Canadian Pacific Railway has an 88 Earnings Per Share Rating, out of 99. It also carries a B Accumulation/Distribution Rating, showing that institutional investors are fairly heavy buyers of Canadian Pacific stock. Its 89 Composite Rating also points to increasing strength.

The Composite Rating combines five separate proprietary IBD ratings, based on key fundamental and technical criteria, into one easy-to-use score. The best growth stocks have a Composite Rating of 90 or better.

Profits, Sales Both Rising

Taking a look at revenue and profit performance, the company has posted rising EPS growth in each of the last two reports. Revenue growth has also increased during the same period. Last quarter, Canadian Pacific’s EPS surged 40% to $2.13 on a 26% increase in revenue to $4.51 billion.

Canadian Pacific Railway operates nearly 12,500 miles of tracks in the U.S. and Canada. And Canadian Pacific stock earns the No. 4 rank among its peers in the Transportation-Rail industry group. Norfolk Southern (NSC) and CSX (CSX) are also among the group’s highest-rated stocks.

When you’re researching the best stocks to buy and watch, keep a close on eye on relative price strength.

IBD’s proprietary RS Rating measures market leadership by showing how a stock’s price movement over the last 52 weeks measures up against that of the other stocks in our database.

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