🚂 Jon spots a bearish setup in CSX Corp (CSX)

• Trade Set Up – Call Credit Spread: Sell the May 23rd 29/31 call spread for at least $0.35 in credit
  

• Sell to Open: CSX 23 May 29 Call

• Buy to Open: CSX 23 May 31 Call

• Expiration Date: 5/23/2025

• Minimum Credit: $0.35 (= $35 per spread)

• Cash Needed: $200 per spread

• Time in Trade: 31 days (if entered on 4/22/25)

• ROI on Winning Trade: 20%

• This is a bear call spread, which profits if CSX stays below $29 through 5/23/25.

• Risk is limited and defined, since it’s a vertical spread.

More on CSX:

• CSX posted disappointing earnings and revenue, both missing estimates

• Company cited “operational challenges” from infrastructure projects and weather disruptions

• A significant portion of rail traffic is tied to global trade, which faces uncertainty

• Analysts lowered price targets but kept “moderate buy” ratings, with targets still 20% above current price

• Stock is down 25% from its November high and 18% in the last two months

• The decline has been guided by the 20-day moving average, which CSX hasn’t closed above since Feb. 18

• The short call strike ($29) sits above the 20-day, making this a technically favorable setup

CSX Chart: The blue horizontal line on the chart below represents the sold call strike ($29). The red vertical line represents the expiration date for the contract (5/23/25).