Does Union Pacific's Recent Action Support The 'Econ Bulls'?

Union Pacific Corporation UNP shares managed to hold up above trend line support during the recent market sell-off, and have been leading stocks higher on the rebound.

But do the fundamentals justify the technical strength?

What The Bulls See...

• A price-to-sales ratio of 4.36
• An enterprise value of $111 billion versus a market capitalization of $102.25 billion
• 20.98 percent net profit margins that spin off over $2.99 billion in levered free cash flow annually
• A 53.38 percent debt-to-equity ratio
• A current ratio of 1.25
• An annual dividend rate of 1.70 percent

What The Bears See...

• A price-to-book ratio of 4.75
• A P/E of over 17 versus estimated revenue and EPS growth for 2015 of 6.8 percent and 15.3 percent, respectively

The Technical Take

Technicians note that at $116.40 in the pre-market on Friday, Union Pacific stock is in a new, higher uptrend channel with projected resistance near $130 and support between $97 and $100. The stock is clearly overbought –- right along with the market in the short-term.

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That could mean, theoretically, that shares pull back to test the recent breakout point near $110.