CSX (CSX) Showing Signs Of Being A Roof Leaker

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified CSX ( CSX) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified CSX as such a stock due to the following factors:

  • CSX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $261.2 million.
  • CSX has traded 1.7 million shares today.
  • CSX is trading at 1.71 times the normal volume for the stock at this time of day.
  • CSX crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on CSX:

CSX Corporation, together with its subsidiaries, provides rail-based transportation services in the United States and Canada. It offers traditional rail services, and transports intermodal containers and trailers. The stock currently has a dividend yield of 2%. CSX has a PE ratio of 19. Currently there are 6 analysts that rate CSX a buy, no analysts rate it a sell, and 12 rate it a hold.

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