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Swing Trade Idea (CP) – January 09, 2024

Our bearish trade for Tuesday, January 9th is Canadian Pacific Kansas City Limited (CP). CP is part of the Materials Sector, which has performed at -1.61% over the last week, with CP performing relative to its sector at -0.19% over the same period, as both have traded into areas of resistance.

CP had a bullish rally since the start of November 2023 and is now showing signs of exhaustion as it traded into resistance at $80. As the general market, as well as its corresponding sector, has is also starting to pull back, we expect further downside with support at around $74 and then $70.

As a close, if CP were to trade above $80 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $1.86.