By Barbara Kollmeyer, MarketWatch
It’s time to ride the rails. And maybe hop in a fast car while you’re at it.
That’s the latest advice from MKM Partner’s chief market technician Jonathan Krinsky, who says these industrial sectors are about to bust higher, taking related shares along for the ride.
Billionaire investor Warren Buffett is one of the biggest railroad fans, so much so that he bought Burlington Northern Santa Fe several years ago. But then he also let go of Norfolk Southern /zigman2/quotes/200877725/composite NSC -1.31% and Union Pacific /zigman2/quotes/209717171/composite UNP -0.92% .
Norfolk Southern and Union Pacific are among the railroads recommended by Krinsky, who says pick trains over planes when it comes to industrials, which he believes are “poised to break out of a multi-month trading range.” That breakout suggests about 3% upside for the sector, he said, using the Dow Jones U.S. Railroads Index /zigman2/quotes/210598912/realtime XX:DGUSRAIA -1.05% as a guide here:
MKM Partners LLC
More generally in the industrials sector, Krinsky suggests investors pick up Emerson Electric Co. /zigman2/quotes/200181610/composite EMR +0.10% , Paccar Inc. /zigman2/quotes/207923670/composite PCAR -0.24% , Roper Technologies Inc. /zigman2/quotes/204270015/composite ROP +0.84% and Textron Inc. /zigman2/quotes/210490092/composite TXT -0.57% .
And it isn’t just trains. Krinsky also sees a breakout coming for global autos, noting that the Nasdaq OMX Global Auto Index hit the highest level in more than two years last week:
Within that sector, he has BMW AG /zigman2/quotes/209548467/delayed DE:BMW -2.05% , General Motors Co. /zigman2/quotes/205226835/composite GM -1.81% , Tesla Inc. /zigman2/quotes/203558040/composite TSLA +0.18% Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 +1.10% , Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 -0.25% , Michelin /zigman2/quotes/203570581/delayed FR:ML -0.72% and Peugeot SA /zigman2/quotes/203546414/delayed FR:UG -1.52% on his list of buy ideas.