| Tickers in this article: TRN, IP, MON, PBI Keep in mind the longer-term trend when looking at stock charts. Short-term rallies may make it seem like a stock is reversing from a downtrend, but quite often these rallies will fail as the price gives way to more selling. Eventually a stock will reverse, but before stepping in to buy certain technical factors should align. For these stocks the technical factors still point to more downside.
Trinity Industries Inc. (TRN) peaked at $50.77 in 2014. In 2015 it reached as high as $36.60, before declining from that resistance area. Since then it has continued to make lower swing highs and lows, until recently. In August the price hit a low of $21.79; in October the low was $21.82, just slightly above the prior low. The price has since proceeded to rally to a October high of $28. The rally has been quite strong, and the higher low that preceded it does indicate the sellers may be decreasing in strength. $28 to $28.50 is resistance the price needs to overcome if the stock is ultimately to reverse. A 4.04% drop on October 16 adds to the overall bearish outlook. This remains a short trade as long as the price stays below $28.50.
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