With increasing speculation about a project infrastructure-focused stimulus plan, many traders are to prepare a list of assets that might be on the point of benefit. In the paragraphs below, we’ll take a closer look at some specific charts of the sector as a whole that could be worthy of a more in-depth review.
iShares U.S. Infrastructure ETF (IFRA)
Traders who are looking to get a general idea of where infrastructure stocks are headed often turn to the niche market of exchange-traded funds (ETFS), such as the iShares U.S. Infrastructure ETF (IFRA). As you can see on the chart below, the infrastructure sector has rebounded strongly since the March lows in a mode that is almost identical to all the other sectors through the U.S. financial markets. What is particularly interesting at this point is speculation $ 1 trillion of stimulus, which would supposedly be directed towards assets such as roads, bridges and communication infrastructure.
You will notice that the spike in volume and suddenly the interest of the buyers has acted as enough of a catalyst to briefly send the price of the INFA influential above the 200-day moving average. Depending on the risk tolerance, some bullish traders may wish to sit on the sidelines and wait until they see several consecutive closes above $25.37 because it would probably be the technical signal that indicates a true change in the underlying trend. Other merchants may choose to pass also near the 200-day moving average as possible in anticipation of a breakout should the details of a stimulus to be revealed in the course of days or weeks in advance.
EnLink midstream, LLC (ENLC)
While most attention is given to infrastructure sectors such as those mentioned above, another area that could be interesting to take a closer look, is related to the energy infrastructure. Taking a look at the chart of EnLink midstream, LLC (ENLC), which is the top holding of the IFRA ETF, you can see that the price has recently broken above a very influential trend.
The close above the trendline and subsequent retest of the new support suggest that the bulls are now in control of the momentum and that this could be the beginning of a long-term bullish. From a risk management perspective, stop-loss orders will probably be placed below the dotted trendline, or the proximity of a moving average in order to protect against any sudden change in sentiment or fundamentals.
Antero-posterior Processing Society (AM)
Another top holding of the IFRA, which attracts the attention of active traders is Anterior-posterior of the Processing Company (AM). As you can see on the chart below, the price has rebounded strongly since the March lows and has recently closed above the combined resistance of its 200-day moving average and descending trend line.
The recent bounce from $ 4.85 confirms that the bulls are now in control of the momentum, and that the price is ready to make a move higher. Stop-loss will probably be placed below $4.85, or $4.26, depending on the risk tolerance and investment horizon.
The Bottom Line
Infrastructure Stocks have been in the spotlight early in the week on speculation of a related infrastructure recovery plan that could be announced by the President of the Trumpet. As we discussed above, the recent share price and the proximity to the levels of support suggest that the segment could be in the early stages of a long-term bullish.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.