Trade of the Day: Norfolk Southern Corp. (NYSE:NSC)

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The equity market is right at the top of its trading range and, while it’s holding steady, a huge amount of overhead resistance remains intact at and above its current level.

Right now, it’s simply a matter of trying to determine what the catalyst will be that pull the bears out of hibernation. Many in the investing community are leaning towards a rate hike as soon as June, and they are betting that another move by the Fed will ignite new downward pressure on equities.

If the market does take a crack at its major overhead resistance levels in the short term, I believe it’ll either be some kind of head-fake or simply a marginal gain to the upside.

It’s really a question of whether the economy takes its unpleasant medicine now and nurses itself back to health over a longer period of time or waters it down. History tells us to be prepared for a steep drop, as we usually have at least one every decade — and we’re long overdue. That said, let’s play the downside on a transportation giant.

Buy to open the Norfolk Southern (NYSE:NSC) Jul 77.50 Puts (NSC160715P00077500) at $1.05 or lower.

Note: This is a relatively thinly-traded option chain, so you may need to be patient to get established at my recommended entry.

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Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/trade-day-norfolk-southern-nyse-nsc/.

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