This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
Did you know that the industrial sector has been resilient in 2022?
It had started the year like many other sectors – weak.
As time passed, this sector grew stronger, ending the year nearly where it had started at.
In this sector, there’s a stock that has been rising quietly.
And I’d like to bring your attention to it – Trane Technologies.
Let’s find out more about Trane Technologies before determining if you should buy its shares for a position trade.
Brief History of Trane Technologies
Trane Technologies was founded more than 130 years ago, in 1885, as a plumbing business.
It isn’t the usual plumbing business as Trane Technologies sought to innovate, coming up with useful products such as a low-pressure steam heating system and a water chiller.
The water chiller gave rise to the industry’s approach to large-building air conditioning systems.
Trane Technologies didn’t rest on its laurels. Instead, it sought for more problems to solve and came up with the first transport refrigeration unit.
We are huge beneficiaries of this transport refrigeration unit as the transportation of perishable food over long distances has raised our standard of living.
Can you imagine living in Singapore or Malaysia and not being able to enjoy the enormous and sweet fruits of Japan?
Apart from innovating, Trane Technologies had followed the path of many successful companies by acquiring other companies.
Knowing its journey, has Trane Technologies been financially strong and healthy in recent years?
Business Model and Financials
Between 2015 and 2021, Trane Technologies’ total revenue has been steady around $13.5b.
2018 was a standout year where its total revenue rose to $15.6b.
Its net income is as important as its total revenue. So, let’s have a look at its net income over the years.
Trane Technologies’ net income fluctuated more than its total revenue, with wild increments of 122% and 66% experienced in 2016 and 2021 respectively.
With such wild fluctuations, the financial health of this company is less predictable.
The company has also branched out of plumbing, heating, and cooling systems. It has ventured into the accounting and logistics space, providing valuable solutions.
To know whether the time to buy shares of Trane Technologies for a position trade is here, let’s turn our attention to its price chart.
Technical Analysis on Trane Technologies (NYSE: TT)
At a glance, you can tell that the share price of Trane Technologies is rising! It has been rising since July 2022.
But this doesn’t answer the question on whether its shares are ripe for a position trade.
There are two indicators which you can rely on to help you decide.
The first indicator is the upward pointing arrow in green.
When the green arrow is present, it tells you that a new uptrend has begun.
Why is this important?
You won’t want to buy a stock when its prices have been trending for some time so as to increase your odds of success.
The next indicator you’ll want to look at is the Trend Impulse Factor. To be more precise, you’ll want to see the color of its bar.
When it’s dark green in color, it indicates that there’s sustained bullish momentum. This is important as you want the trend to last for a while instead of fizzle out in a couple of days.
Hence, you’ll want both the green arrow and dark green bar of the Trend Impulse Factor to appear at the same time.
And yes! Both are present at the latest candle of Trane Technologies!
Buying the shares of Trane Technologies now for a position trade looks good!
The financial reports of Trane Technologies may vary from year to year, but that’s not a deal breaker when it comes to considering it for a position trade.
Though the overall stock market has been battered, there are bright and powerful stocks that have recovered. And Trane Technologies is one of them.
In addition, the appearance of both indicators is a good sign of what’s to come.
Hence, I think that this is a good chance to buy its shares for a position trade.
Trading stocks without a proper system can be highly risky. This is why the TradersGPS (TGPS) was created.
The indicators (red and green arrows and Trend Impulse Factor) will help you determine if a stock is ready for action to be taken. You won’t have to feel in the dark and make wild guesses.
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2022 by far has been one of the toughest years to trade in the past 5 years.
Lots of Singaporeans who dabble in trading or investments have suffered badly this year.
From inflation, interest rates, Ukraine war, financial tensions between US & China, and most recently, the dramatic crypto meltdown…
We’ve seen nothing short of constant volatility and a persistently declining stock market this year.
Many people I know have incurred 5 to even 6 figures losses and others are holding on to 20-80% unrealized losses.
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