Over the past few weeks, we have focused on companies powering the next great infrastructure boom. First, it was Generac , which sits at the intersection of power reliability and the explosive energy needs created by artificial intelligence data centers. Then it was Caterpillar , whose heavy machinery and record backlog highlighted the physical demands of rebuilding America’s infrastructure. Technically, both charts were great risk/reward plays. Caterpillar’s chart stretched beautifully from the bottom left to the top right of the page — your classic uptrend. Generac is a textbook reversal from a long consolidating base with much upside to get back to old highs. Both setups treated us well, so why not swim in those waters again? As I look for themes over the second half of the year, nothing is changing my mind on the continued build and infrastructure story. Again, as we turn to the charts and search for great risk/reward setups, I keep coming back to midcap industrial growth. These companies may not grab the same headlines as the mega-cap AI names, but they are becoming critical players in the picks-and-shovels trade and are technically sound as well. This week’s search brings us to MasTec . It’s a key builder of transmission lines, electrical grids, fiber networks, and energy infrastructure. We all know AI data centers require massive amounts of electricity and connectivity, MasTec is positioned as a key player helping expand and modernize the grid needed to support that buildout. Better yet, it has a technical setup worth exploring. Here we examine the one-year daily chart. Shares have been on a heck of a run – up about 133% over the last 52-weeks. It may feel tough to chase at these levels, but the recent pullback may be a good trading opportunity. The near-term trade… We see MasTec shares flagging – a classic pullback from a strong uptrend. The stock broke a few key moving averages in the 20-day and 50-day but is starting to recover. This gives us a good risk/reward opportunity over the coming days and weeks. Shares just recaptured the 50-day moving average at $385 as well as its 20-day at $372. Use these levels to manage downside risk. If the pattern holds true these should act as new support levels as the stock continues its climb to old highs at $440. If it fails to hold these averages the quick trade has failed and we will look for a better entry at another time. Also helping our bullish thesis is that the moving average convergence/divergence, or MACD, has just triggered a strong buy signal. The last time the stock had a significant MACD crossover it led to the next leg higher. The longer-term trade… When we back this MasTec chart out to a five-year weekly it looks even better. If the short-term setup hits some turbulence and we don’t break out of this flag in the coming weeks, then we look to the long term for a better entry. Shares consolidated for years before breaking out in late 2024. After breaking out, the stock began a powerful uptrend that continues to ebb and flow higher. Currently we are in one of those ebbs when looking at the weekly chart. We have seen this flagging pattern before and may remain in this phase a little longer. If so, we turn to the longer-term trendline that has guided us on this journey upward. Here we look for support at the $340 level, which would be slightly higher than its recent lows. Momentum-wise, MACD is confirming the price action as MasTec has made higher weekly lows along with price. However, to the far right of the chart we can observe a negative crossover and may misinterpret this as a sell signal. As technicians, we have rules to negate false MACD signals; we can deploy trendlines to show price has not violated the primary growing trend, and neither has MACD to its own uptrend line. Using the trendline as our support, we have clearly defined risk/reward parameters, albeit slightly wider on the long-term time horizon. Near term for those with a low risk tolerance, use your moving averages as the guide. They should hold, and the stock will likely make a run to old highs at $440. Long term for those with more patience, respect the trend and use this weekly flag to buy dips and wait for confirmation of a breakout. Matching the technicals with fundamentals is always helpful. We know the first phase of the AI trade was about chips. The next phase continues to be about the build. From Caterpillar moving the earth, to Generac keeping the lights on, and MasTec connecting the grid, the infrastructure winners continue to prove that the AI boom is much bigger than just mega-cap technology names and the trends are showing us that. Jay Woods, CMT with Chase Games DISCLOSURES: None All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
