When Technical Conflicts with Fundamental: Case Study of CSX

Yesterday CSX released strong Q2 earning report, which kicked start Q2 earning season with positive note, the result was more positive than Alcoa did.  Despite the stock market gained broadly today, CSX stock posted a 1%+ decline on 200%+ of average volume, and from chart perspective, today's CSX action formed an outside key reversal candle pattern, this pattern comes after 4 days of continuous rally.  According to technical analysis text book, this pattern signals reversal of bullish trend and start of bearish trend.  While the prediction from technical perspective can be true, we cannot rule out an alternative explanation from WSJ: today's decline was because increased appetite for risk assets drove investors to get out of relatively low risk railroad sector and move to more risky sector.

My gut feeling is that prediction from fundamental perspective has better chance to be correct.