Railroad Stock Continues Rally After Buyback Announcement

NSC is on track for its 11th daily win in the past 12 days

Deputy Editor
Mar 30, 2022 at 10:26 AM
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Norfolk Southern Corp (NYSE:NSC) is in the spotlight this morning, after the railroad operator announced a $10 billion share repurchase program. The program will begin April 1, 2022, has no expiration date, and can be modified or terminated at any time. NSC is up 1% to trade at $288.52 at last glance. 

This positive price action has Norfolk Southern stock looking to secure its 11th daily win in the last 12 days, with recent support from its 10-day moving average. Following its recent rally, the stock is now a chip-shot away from its year-to-date breakeven level. 

The security is due for a short-term pullback, however. NSC's 14-day Relative Strength Index (RSI) of 83.9 sits firmly in "overbought" territory. 

Albeit amid relatively low absolute volume, puts have been much more popular than usual in the option pits in the last two weeks. NSC's 10-day put/call volume ratio of 34.21 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 98% of readings from the past year. 

That said, now could be a good time to weigh in with options. The stock's Schaeffer's Volatility Index (SVI) of 22% stands higher than just 18% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

 

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