Railroads Over AAPLES?

The following article is written with the understanding that Benchmark Index movements can have different "Trend" implications for equities in separate industries. Before any significant direction can be accurately forcasted for equities, it helps to understand past performance of all equities within their exclusive sector.

The weekly charts can provide a better example of the longer term implications of this correction for the Railroad Industry.

1. (CSX) L= $40.40 H= $53.29 +$12.89
2. (CP) L= $55.37 H= $76.18 +$20.81
3. (FDG) L= $31.21 H= $55.80 + $24.59
4. (NSC) L= $41.36 H= $56.45 +$15.09
5. (CNI) L= $41.89 H= $55.25 +$13.36
6. (BNI) L= $74.20 H= $91.30 +$17.10

This data provides information which can prove "Downward Trending" movements in the broader index provides "Downward Corrective" activity for Railroad Equities. An additional downward movement in the SPX (Wave 5) could create sequences = corrective (W2) OR (W4) for specific equities

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Understanding the difference between Corrective & Trending behaviour will allow you to use a "Risk to Reward Ratio" that is suitable for each trade. Depending on the degree of the wave you wish to trade, each trade is allowed to have "Slippage". This slippage ratio will increase with each degree of higher wave. It is possible to calculate acceptable slippage (from this point on referred to as Price Divergence or PD). Being able to calculate acceptable PD provides an opportunity to limit risk and immediately exit position when initial trade criteria becomes compromised. On the upside, entering positions when the PD occurs allows you to immediately have profit on the trade. If done correctly, price should never return back to your original entry price until the instrument full-fills its profitable pattern implications.