Trade of the Day: C.H. Robinson Worldwide, Inc. (CHRW)
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Today, we’re opening a new bullish trade on C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW). Any sort of breakout from the market’s bottom has been slow to emerge, but Monday’s rally was very broad-based and could initiate the momentum needed to break resistance.
The biggest factor the market has in its favor is that the underlying fundamentals are still very good. Earnings growth is very high, and top-line trends are still strong. It is possible that the delayed buying is a reaction to political concerns, which are going to be hard to predict, but we expect them to be temporary. One sector that had initially lagged as the market found support but which has recently found positive momentum is transportation.
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This is somewhat unexpected because of the reaction to FedEx (NYSE:FDX)’s earnings report last month, but Monday’s J.B. Hunt Transport Services (NASDAQ:JBHT)’s report was very strong and bodes well for its peer, CHRW, which will be reporting at the end of April.
From a technical perspective, Monday’s rally completes a “double-bottom” continuation pattern, and a break of the long-term highs seems likely as investors move in to take advantage of the same kind of top-line growth trends we can now see in JBHT.
‘Buy to open’ the CHRW May 100 Call (CHRW180518C00100000) for a maximum price of $2.40.
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