A Quick Pro Position Update Ahead of the 3-Day Weekend
As we get ready for the three-day weekend, courtesy of the President’s Day holiday, we wanted to check in on our Tematica Pro positions. In doing so, we saw that we were stopped out of the US Concrete (USCR) May 2017 $70 calls as they fell below our 3.00 stop loss level. We booked a very modest gain in the trade, certainly nothing to write home about. USCR calls tend to be volatile, and we’ll keep eyes on them for a possible second run given prospects for President Trump’s infrastructure stimulus plans.
Our PowerShares DB US Dollar Bullish ETF (UUP) June 2017 $27 calls (UUP170616C00027000) finished today up modestly, but the net move in the shares this week was modestly lower. Next Tuesday, we’ll get the Flash February Manufacturing PMI data from Markit Economics. As we noted above, recent economic data for the US has been pointing toward a far firmer economic landscape complete with higher prices, and we’ll look to see if that trend continued during the month. If we see a meaningful pickup like the one we saw in the Empire Manufacturing and Philly Fed indices for February this week, it is bound to ignite chatter over when the Fed may boost interest rates. A pull forward in rate hike timing would bode well for our UUP calls.
- We continue to rate the PowerShares DB US Dollar Bullish ETF (UUP) June 2017 $27 calls (UUP170616C00027000) a Buy at current levels.
- As a reminder, we would buy these UUP calls up to $0.32.
That leaves our newest addition, the Trinity Industries (TRN) April 2017 $30 calls (TRN170421C00030000) that closed the week at 1.05 — a nice move higher from our 1.00 entry point just yesterday. After last night’s market close, Trinity reported better than expected December quarter results and guided the current quarter in line with expectations. We’ll continue to watch weekly railcar traffic patterns, which should tell us how quickly railcar capacity is tightening, as well as infrastructure spending stimulus plans that should drive incremental demand for Trinity’s construction business.
- We continue to rate the Trinity Industries (TRN) April 2017 $30 calls (TRN170421C00030000) a Buy at current levels
- We’d be buyers of the TRN April calls up to $1.35.
Enjoy the long weekend, and we’ll have more Tematica Pro for you next week.
