I will be writing another series on Long & Short Investment covering Rail companies. Generally, there could be some sell-off occurring in these Rail companies. If we add these Rail companies to our portfolio at a right time, we could make some profit from them.
Last week, declined more than 6% after the their 4th quarter earnings. This drop definitely gives us some insight on which direction CSX is headed near future. Looking at the on a 9 months chart, there was a break out on the resistance level at $48 and tried to move up higher. However, the upward support line was broken after the earnings news last week and CSX continued to decline, eventually braking the $48 support level. Now, it is clear that CSX is headed towards $41.50, the next support level. It should present a great buying opportunity to take LONG position on CSX at this support level.
I will apply similar technical analysis on in the next Going LONG or SHORT in Rail Companies series.