Editor's Note:
If the market continues to slip we want to take advantage of the decline to buy the dip.

- James


NEW DIRECTIONAL CALL PLAYS

CSX Corp. - CSX - close: 60.19 change: -1.62

Stop Loss: 55.75
Target(s): 60.00, 62.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Company Description:
CSX Corporation, based in Jacksonville, Fla., is one of the nation's leading transportation companies, providing rail, intermodal and rail-to-truck transload services. The company's transportation network spans approximately 21,000 miles, with service to 23 eastern states and the District of Columbia, and connects to more than 70 ocean, river and lake ports (source: company press release or website)

Why We Like It:
If you believe the economy will continue to improve over the next year or two then we want to keep an eye on the transports for bullish entry points. The railroads are a good industry to focus on. Currently shares of CSX are testing support near $60.00. If this market pull back continues I see the stock declining into the $58-56 zone. We want to buy calls on the dip if that happens. I am suggesting a trigger at $57.75. We'll use a stop at $55.75, which is under what should be support near $56.00. Our first target is $60.00. Our second target is $62.25. More aggressive traders could aim for $64. FYI: The P&F chart is very bullish with a $99 target.

Trigger to buy-the-dip @ $57.75

Suggested Position: Buy the 2011 January $60 calls (CSX1122A60)

Annotated Chart:

Entry on November xxth at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on November 23rd, 2010