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Trade of the Day: Targa Resources (NGLS)

Let others panic out of this name while you profit.


Targa Resources Partners LP (NYSE:NGLS), a master limited partnership (MLP) focused on midstream natural gas and natural gas liquids storage, services and transportation, was socked during November options expiration week by the widespread selloff in the master limited partnerships. It also announced the purchase of new land in the Bakken Shale area of North Dakota, and NGLS has been selling new shares to finance an expansion.

These momentary bouts of panic do not tend to last with the MLPs, and I expect the stock to work its way back to $40 during the next four weeks. So use the moment to go long the shares or buy some calls. I especially like the NGLS Dec 36 calls at $1.35. My initial target for the calls is $1.95.

Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage.

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