Trade of the Day: Trinity Industries (TRN)

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The recent advance in stocks feels lightweight  – and it’s not that I’m complaining, but I have a friend who thinks  it’s one of those situations where six months later we’ll look back and say, “I knew there was something strange about that rally: There wasn’t enough participation.”

Personally, I think we’ll look back and wonder: What was everyone so concerned about? While I do have a few targeted shorts in very select tech names to play near-term pullbacks, I’m largely bullish in my Trader’s Advantage positions right now. In fact, I just recommended that my members add three more long stocks to our lineup, including a big-cap name you might not be familiar with.

Trinity Industries (TRN) provides factory services, but not to the Father, Son and the Holy Ghost, as its name seems to imply. It just makes equipment for the railroad industry — primarily rail cars.

This is a good business, as the rail industry and rail stocks are booming along with the U.S. oil and gas industry. There are not enough pipelines to ship all that new unconventional oil and gas out of the North Dakota and Texas fields, so a lot of it is being transported to refineries by rail.

TRN has been strong for the past year and a half, and has just pulled back to its 40-day moving average.

TRN - stocks

Get long now with expectation of at least a challenge of the highs. Buy TRN shares at $48.15 limit, good till canceled, for initial target $50.25 (set up to sell half there); my second target will be around $52.30.

Trinity Industries is slated to report earnings late October/early November.

Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.


Article printed from InvestorPlace Media, https://investorplace.com/2014/09/trade-of-the-day-trinity-industries-trn-stocks/.

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