Take a look at Westport Innovations (WPRT, $34.50 premarket) for a trade. Although the shares are trading up about 5% in the premarket, the stock is poised for a run given the combination of positive news and strong technicals. The company has announced that it has entered into an additional agreement with General Motors for a second advanced technology program. The first agreement, signed in June of last year was for technology to improve both emissions and fuel efficiency in natural gas engines for light-duty trucks. Today’s agreement will further that effort by bringing a second approach to the table.
At this juncture, WPRT has a number of collaborative efforts and licensing agreements signed with a number of the worlds key truck and heavy construction manufacturing companies. While Westport isn’t profitable yet, the groundwork is laid for strong earnings as the fledgling natural gas transportation fuel market takes off.
On a technical basis, Westport shares were sitting just below their 200-day moving average ($33.07). This morning’s pre-market strength has driven the stock price through this level and their is little resistance til the $37.50 area. My near-term target is $37.50, implying about a 8.7% return to my target assuming an entry point of $34.50. Meanwhile, the TRIX indicator is also signaling a bullish crossover, which also points to a near-term run in the shares.