To receive further updates on this Union Pacific (NYSE:UNP) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of SlingShot Trader today.
Today, we are opening a new bullish trade on Union Pacific (NYSE:UNP). Last week, UNP rallied off of yet another higher low at $130 in the consolidation range the stock has been in since late January as investors looked to the fundamental advantages that should continue pushing the stock higher during the next few months.
Thanks to many actions taken by the Trump administration, UNP is set to benefit from increased transportation demand as coal production increased, from tax savings and expedited tax write-offs from capital expenditures — UNP plans on investing heavily in Texas, Kansas and elsewhere — and from a general increase in transportation demand as the U.S. economy continues to grow.
We are looking for UNP to climb back up to resistance at $140 as the company approaches its earnings announcement on April 26, before market open. We also anticipate that implied volatility levels will rise as we get closer to earnings, which will benefit our long call position.
‘Buy to open’ the UNP May 140 Call (UNP180518C00140000) for a maximum price of $3.15.
Follow our Facebook page to receive each Trade of the Day direct to your News Feed — and join the conversation.
You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.
InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.