CSX - Keep Your Eye on It!

 

So I've been losing my shirt on CSX. After a recent dip I thought the company was ready for a rally. Thus far I've been wrong. Thankfully my position is relatively small compared to my major holdings, SPLS in particular. BUT, today is an important day and this week is going to be a big one for the performance of CSX. I've ridden this one down to its support level right here at $20. 

 

With a double bottom forming here at $20 we are going to see some action off of this price. If it falls below there are no support levels forming for about another 10% below $20. I am still holding my breath for a bounce off of the support level which is why I haven't sold yet. But I will be watching it very closely for the next few days. A day or two below $20 and it will be time to cut and run as it may run all the way down. 

Important note about trading options. Notice that I am experiencing a 50% decline on a 10% decline on stock price. If you are going to be trading options you have to be able to take the swings and you must diversify. The only good news is that a week or two in the other direction and 10% can double the options price. For me and the $1000 I'm starting with the risk is worth while, and thus far it has been profitable.

Thanks for reading!

Straight form the Chart

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform. 

SPLS - Continues to Rally

 

So I started this experiment with only $1000 so my dollar numbers are small. Don't look at the dollar amount ($110  Profit) but instead look at the percentage. As of today I have a 41% gain in the SPLS Jan 2013 option with a $15 strike. This option got cut in half on the 10% decline in stock price when the Q4 results were announced creating a terrific buying opportunity. It has bounced right back to where it was before the dip. But don't go anywhere yet. There is more to come for SPLS.

Staples (SPLS) raised its quarterly dividend by 10%. In the land of performance signaling raising the dividend usually means that management is confident in continued growth. Ignoring the crazy sell off that we took advantage of the other day, this stock has been showing an upward trend and higher lows since October. This stock has a 52 week high around $21. I don't know about $21, but I am calling that the long term outlook is a $19 target price. With the recent sell off on huge volume, I think most of the profit taking is out of the stock, clearing the way for a continued rally.

Disclaimer:
Just to be clear, nothing that I'm posting on this blog is in any way advice that should be followed by anyone else. All investment decisions should be made carefully by all individuals taking into account their own financial situation and appropriate levels of risk. Do not take anything I say for anything more than it is, opinion, speculation, and woefully undereducated guesses as to how I think a few stocks are going to perform.