3 Plane, Train and Automobile Stocks to Trade

transportation stocks - 3 Plane, Train and Automobile Stocks to Trade

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The holidays are officially upon us and Covid-19 be damned, we’re going to our destination and will enjoy ourselves! It’s as true for a seasonally joyful market with its bountiful stocks to trade, as it is for Americans traveling by air, rail and car this year.

Today and to embrace some of this broader conviction by traders and neighbors alike, let’s explore three stocks to trade courtesy of transportation companies, then decide whether they’re safe vehicles for bullish or bearish passengers to climb aboard.

“Those aren’t pillows!” Much like the famous scene from the classic holiday film Planes Trains and Automobiles, it wouldn’t be entirely a surprise if Wall Street wakes up sometime soon to realize the corporate jewels they’ve been fawning over aren’t what they think they are.

The fact is, today’s stock market is rather … no, extremely expensive. And it’s been that way for months, with all sorts of bells, whistles and horns warning bulls that many of today’s most popular stocks to trade are riskier merchandise due for larger corrections.

Having said that, let’s look under the hood at three of today’s largest and most dominant transportation companies, then determine whether bulls or bears should be ready to come to Wall Street’s table and feast.

  • Delta (NYSE:DAL)
  • Greenbrier Companies (NYSE:GBX)
  • Uber Technologies (NYSE:UBER)

Transportation Stocks to Trade: Delta (DAL)

Delta Airlines (DAL) a soft landing for DAL stock's uptrend, but one in need of confirmation from stochastics
Source: Charts by TradingView

The first of our transportation stocks to trade is Delta. And the forecast is that the airline giant’s shares are readying for takeoff.

The world hasn’t famously changed nearly as much as the Oracle of Omaha warned back in May 2020 while dumping Berkshire Hathaway’s (NYSE:BRK.A, NYSE:BRK.B) entire airline portfolio.

Today the airline business has rebounded sharply back to levels nearly on par with pre-pandemic travel according to AAA. And DAL stock is at the top of the heap.

Moreover, DAL stock is back in the black with quarterly profits for the first time since Covid hit globally, a rock solid balance sheet and a soft landing on its price chart. DAL is a stock to trade long!

Wait to book your travel plans in this stock until a bullish crossover confirms Delta’s intact pullback signal within its uptrend. Should it occur, my outlook calls for Delta shares to climb gradually towards “D” on the chart and complete a Fibonacci-based two-step pattern by mid-summer.

To position in this stock, I’d suggest going with a DAL stock intermediate-term out-the-money vertical due to its superior leverage and unmatched safety features.

Greenbrier Companies (GBX)

Greenbrier Companies (GBX) is both a bearish downtrend and bullish double bottom suitable for either bears or bulls
Source: Charts by TradingView

The next of our transportation stocks to trade is Greenbrier Companies. And in our estimation, GBX is a stock that bulls and bears can consider climbing on board with.

Shares of the rail operator appear expensive compared to the broader market based on its current P/E of 42. Yet that’s despite this stock still being stationed at levels first hit back in 2014.

The situation follows a period where profits were derailed. The good news? Earnings growth is expected to resume next year in a big way. But will that forecast hold water?

With the slightly dicier pricing in this stock and a monthly chart revealing a double-bottom with handle for bullish operators and a downtrend for bearish passengers, my recommendation is to be flexible.

Bottom line, trade GBX’s pending failure beneath the 50% support level or a handle breakout in conjunction with stochastics confirmation to make this stock to trade a stronger decision.

Transportation Stocks to Trade: Uber Technologies (UBER)

Uber Technologies (UBER) bearish flag setting up with yellow warning from stochastics of pending drive lower in UBER stock
Source: Charts by TradingView

The last of our transportation stocks to trade are shares of Uber Technologies. And I’m warning investors to steer clear of the automobile rideshare giant, unless they’re hitching a bearish ride south.

Investors kicking the tires of UBER’s recent Q3 earnings report saw a first-ever adjusted EBITDA profit, and beat the street with stronger-than-forecast sales growth.

And bulls liked what they saw, briefly at least. In the report’s aftermath, this stock saw its own version of more modest “surge pricing” to the tune of 4.24%.

Today though, those UBER stock investors are underwater. And technically, bears are in the driver’s seat on the price chart.

Currently, Uber shares are trading inside a bear flag formed in a building downtrend set between the stock’s former all-time-high and the 50% retracement level tied to its March 2020 Covid bottom.

With stochastics warning of more trouble ahead, investors might consider proceeding safely across the street into a more bearish neighborhood using a well-placed Feb $37.50/$32.50 bear put spread.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


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