Poised to Rumble Higher

If you like the machinery-industry group that resides within the industrials sector, you may want to take a look at the Crane (CR). This name is showing solid fundamentals, with steady earnings and a respectable dividend. Plus, the stock looks ready to enjoy an upside breakout from a triangle formation on the daily chart. Founded in 1855, and based in Stamford, Conn., Crane manufactures and sells highly engineered industrial products to customers in the U.S. and around the globe. The company operates in five segments: aerospace and electronics, engineered materials, merchandising systems, fluid handling and controls. Its product line is extremely diverse, with such offerings as position sensors and custom microelectronics, vending machines and software, commercial valves and actuators and water-treatment equipment. In the most recent quarter, Crane reported a strong gross profit margin of 36.34%. The net profit margin, at 8.45%, was higher than the industry average. It also showed a low debt-to-equity ratio of 0.41, suggesting successful management of debt levels, and year-to-date earnings growth has been muscular at 27.39%. Crane's current price-to-earnings ratio is at a reasonable 16.31x, a discount to its peers, and the company pays an annual dividend of $1.12 for a current yield of 1.89%. When we look at Crane's daily chart, we see that the price has been in a steady, orderly uptrend since the first trading day of 2013, when the stock opened at $47.32. Crane (CR) -- Daily Source: RealTick View Chart » View in New Window » For most of this year, Crane has traded above its 20-day simple moving average (red on this chart), its 50-day SMA (green) and its rising 200-day SMA (black). With the exception of a dip below its zero line in April, and again in September, the moving-average convergence-divergence (MACD) indicator and its red signal line show that the price has kept this trend-lagging indicator in a buying position for motivated investors. (The MACD and red signal line are plotted over the volume spikes in the bottom scale of this chart.) Many investors prefer to purchase and hold stocks only as long as their target stock's MACD remains above the indicator's mid-line, also referred to as the zero line. At the moment, Crane's MACD and its signal line are poised right at the zero line and hooked slightly higher -- so they appear ready to jump up once again. The 14-day relative-strength index, plotted on the middle scale, is rising. That's another positive signal. If the market environment stays positive, I will consider purchasing one-half my intended position in Crane in an entry window between $61.40 and $62.10. Those who prefer to wait until Crane closes above $62, above the blue channel line on this chart, will have the added reassurance of knowing Crane accomplished the upside breakout of its triangle formation. If or when Crane climbs above $62.75, I will add the remaining shares to my position. My initial protective stop will be placed at $59.25 (trail), and my initial profit target will be $64.25. Crane's third-quarter earnings are due Tuesday, Oct. 28, after the closing bell. Please know that I may wait until after that date to purchase the second half of my position. Finally, Crane's all-time high was reached July 11, at $64.68. If Crane continues its Steady-Eddie uptrend and penetrates this high, and if the market environment remains positive for industrials, I will keep my position for the longer-term.

Poised to Rumble Higher

Shares of this solid industrial look ready to jump again.

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