Smart Money Targeting This Overlooked AI Winner

When short-term momentum overtakes the long-term trend and holds, it’s not just a blip—it’s a signal the bulls are in control. That’s exactly what we’re seeing in this standout name from the industrial space. Back in mid-May, one of my longtime favorite trend following systems triggered a ‘Buy’ when a key bullish crossover occurred. This is a classic trend-strengthening signal that often marks the early stages of a sustained move higher. Since then, that momentum hasn’t just held—it’s gained traction. With steady price action, rising volume, and continued relative strength, this stock is quietly becoming one of the strongest technical setups in the market right now. Investors are taking notice, and the trend is showing no signs of cooling off!

The company that I’m hinting at is Trane Technologies, symbol: (TT)—a global leader in high-performance HVAC systems that are becoming mission-critical in one of the fastest-growing sectors of the economy: AI infrastructure. As data centers multiply to support the explosive growth of artificial intelligence, so does the need for advanced, energy-efficient cooling systems to keep those massive computing hubs running. Trane’s technology is at the heart of this buildout, delivering precision climate control solutions for facilities that simply cannot afford downtime. While sustainability remains a powerful long-term theme, it’s Trane’s deep integration into the backbone of the AI revolution that’s giving the stock fresh momentum—and why smart money is paying close attention.

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As significant flows of institutional money have poured into this stock in the past few months, you can see in the chart above, the price action has responded accordingly. Since early April, TT has rallied 47% and now it appears the stock is primed to break out to fresh highs after a brief consolidation period. This rally that ignited the stock, pushing it higher, is what triggered the 50-Day EMA to cross above the 100-Day EMA. This ‘Buy’ signal has only strengthened of late as the margin between the 50-Day and 100-Day is widening. In recent weeks, TT has begun to regain momentum and is also making a series of higher lows. With TT on the precipice of powering to new highs once again, this is a bullish trend that I want in on. But I don’t want to keep this all to myself, which is why I put together this write-up for you!

Chasing a red-hot stock after a big run can be risky—especially if it starts to cool off unexpectedly or continues to trade sideways in the short term. That’s why, instead of going with an aggressive directional play, I’m taking a more surgical route. I’ve targeted a call debit spread that would be positioned to profit without needing a big move higher. In fact, this setup still delivers a 53.8% potential return if the stock rises, simply holds steady—or even pulls back by as much as 7.5% by expiration. It’s one of my favorite ways to lean bullish while giving myself plenty of margin for error. Want to learn how to build trades like this? Click the ad below to get our free e-book on smarter options strategies.

Wishing You the Best in Investing Success,