This Trader Thinks Kansas City Southern Is Oversold

Serge Berger is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.

Serge Berger is a trader and money manager in addition to an author and educator for thesteadytrader.com. Berger discussed stocks that are oversold, particularly names within the railroad space. Berger singled out Kansas City Southern KSU as being oversold after getting "smacked down" last Friday to the lowest level it has seen since March 2014. "I think this stock is overdone, good for a bounce," Berger said. "I want to see some sort of bullish reversal or exhaustion to get this thing back in to the high $90s, maybe mid-$90s." He added that transportation stocks in general are "exhausted" but investors can look at Kansas City Southern for some upside. The trading pro suggested he is going to follow the stock and enter an initial position of one-third his desired side during Monday's trading session. If the initial trade doesn't immediately work in his favor he will acquire the remaining two-third position either later on in the day or on Tuesday. He is expecting a bounce in shares to occur "rather soon." Naturally, Berger cautioned that a bounce in shares of Kansas City Southern isn't guaranteed and investors should exercise caution and limit downside risk. Shares of Kansas City Southern reached new 52-week lows of $90.02 before rebounding and trading in positive territory for the day.