DiscordiaResearch

The Railroad Rally Is Overdone

Short
NYSE:KSU   Kansas City Southern
I was talking to a buddy of mine last weekend who works in lumber, and we were just chatting about the markets over some drinks. At one point in the conversation, we were talking about shipping, and he was mentioning that "you can't beg, borrow, or steal" (verbatim) freight traffic right now, because of the shipping situation at the port of LA. In other words, rail is seeing a huge temporary spike in demand as long tail covid shipping - related effects come to roost. Then and there, I had the idea to be short railroads on this hype, and I've been looking for an entry point ever since. I think we are in the right zone for a short, but I'm not exactly sure where I'd like to risk vs, and so I've settled on a 312.5 jan 4th covered puts trade yielding about 1.4%. Rails are low ATR, and i like it from a risk perspective - either I get to improve my price on a short trade, or my directional bias helps me make a great annualized return. Either way, I think the time is now (or very soon) to fade these.
Comment: A quick update: Since everyone is wondering about the KSU bidding situation, it might not be the ideal candidate for most in this trade. The other rails are in a similar position - you can really take your pick.
Comment: also PSA: This account was previously called "Pholesolus". I'm starting a research service, so give me a follow & get notified when I launch! I'm really looking forward to the stuff I'm going to be putting out over the next few weeks.

Cheers!

Comments

Very few traders are looking at the railroad sector. But that's exactly why this idea has been featured in Editors' Picks. Interesting!
200 coins
+8 Reply
@TradingView, Thanks, as always! haha
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Sell the rumor, buy the fact , or is it the other way around?
+3 Reply
@mrwizard9000 Other way around..but you were close! 😁Best advice ever for crypto trading. I think it was Warren Buffett who coined the term ( no pun intended).
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You have a linked website that is password protected?
+3 Reply
DiscordiaResearch Jabronitrades
@Jabronitrades, I haven't finished it yet! will announce when i do.
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Hi

What script is that on the right that smooths the price?
+2 Reply
jthrasher GarethSA
@GarethSA, was wondering the same. Looks like some kind of renko/heikin ashi hybrid. Looks great, though
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name of 2 indicator?
+1 Reply
@PointBreak83 yet u house c8 TY 666 phi 67 7th 896 u hogue y to r uMoby
Reply
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