Trinity Industries, Inc. (TRN) Speculators Count On a Rebound

One trader bought to open 4,000 weekly 4/24 34-strike calls on Trinity Industries Inc (NYSE:TRN)

Apr 22, 2015 at 1:40 PM
facebook twitter linkedin


Trinity Industries Inc (NYSE:TRN) is getting hammered on reports the industrial company is being investigated by the Department of Justice. At last check, the shares were down 8% at $33.35. However, a number of short-term options traders are counting on a technical rebound by week's end.

Diving right in, TRN calls are crossing at six times the usual intraday rate, and more than double the pace of puts. Buy-to-open activity is detected at the weekly 4/24 34-strike call, as speculators -- including one buyer who initiated a 4,000-contract sweep -- are confident the stock will muscle back above $34 by Friday's close, when the weekly options expire.

For the past few months, TRN calls have been bought to open over puts at an accelerated clip. The equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.02 outranks 72% of comparable readings from the past year.

Analysts are also extremely bullish on TRN. Nine of 10 brokerage firms consider the shares a "buy" or better. Plus, the equity's average 12-month price target of $40.80 stands at a 22.3% premium to the current perch.

On the charts, Trinity Industries Inc (NYSE:TRN) has been a beast in 2015, adding more than 19%. However, if the stock extends its losses beyond today, an unwinding of optimism on the Street could result in headwinds.

Bernie's Best Stock Bets for Summer 2021

1608308875

 




 
Special Offers from Schaeffer's Trading Partners