4 Trade Ideas for Norfolk Southern: Bonus Idea

Norfolk Southern Corporation Logo

Here is your Bonus Idea with links to the full Top Ten:

Norfolk Southern, $NSC, comes into the week in consolidation at the 20 day SMA and under the flat 50 day SMA. It has a RSI rising at the midline with the MACD curling to cross up but still negative. This is after a shallow pullback from a retest 2022 high. There is resistance at 285 and 288 then 291.50 and 294.75 before 297.50 and 301.50. Support lower is at 279.50 and 276. Short interest is low at 2.6%. The stock pays a dividend with an annual yield of 1.90% and began trading ex-dividend Friday.

The company is expected to report earnings next on January 27th. The November options chain shows biggest open interest at the 265 then 280 put strikes and at the 280 call. In the December chain it is biggest at the 270 put and spread from 270 to 340, slightly larger at 320 on the call side. Finally, the January chain has biggest open interest at the 240 put strike and the 300 call strike.

Norfolk Southern, Ticker: $NSC

Trade Idea 1: Buy the stock on a move over 285 with a stop at 275.

Trade Idea 2: Buy the stock on a move over 285 and add a November 280/275 Put Spread ($2.45) while selling the December 300 Call ($1.85).

Trade Idea 3: Buy the November/December 290 Call Calendar ($3.35) while selling the November 277.50 Put ($1.70).

Trade Idea 4: Buy the January 270/290/300 Call Spread Risk Reversal ($1.40).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the 1st week of November in the books saw equity markets showing some jitters, falling in a week filled with election results, Fed speak and tariff legitimacy debate.

Elsewhere, look for Gold to continue the uptrend with some short term consolidation while Crude Oil moves lower again in consolidation. The US Dollar Index shifts to a short term drift to the downside as it tries to round out a bottom, while US Treasuries give up the breakout in consolidation, putting at risk of an intermediate term reversal higher. The Shanghai Composite looks to continue the uptrend at 10 year highs while Emerging Markets stall in their uptrend near 4 year highs.

The Volatility Index looks to continue to drift up in the normal zone slamming the brakes on the equity moves higher and setting them back. The charts of the SPY, the IWM and the QQQ remain strong on the longer timeframe but with a crack showing in the armor. On the shorter timeframe the SPY and QQQ have reset from the all-time highs to the 50 day SMA and are a risk for further downside, while the IWM looks most vulnerable to more downside. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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