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This industrial stock could be the best way to ride sector surge, trader says

VIDEO2:5402:54
This industrial stock could be best way to ride sector surge, trader says

Industrial stocks are powering up this month.

The XLI industrials ETF, which holds Boeing, Honeywell and Union Pacific, has added more than 2% in the past week. That gain is more than double the advance on the broader S&P 500.

"We're still seeing strength in that sector. We're seeing continued rotation into the industrials," Todd Gordon, founder of TradingAnalysis.com, said on CNBC's "Trading Nation" on Tuesday.

He says one name could be the best bet to ride the wave.

"I like the chart setup in John Deere with the agricultural play and with obviously a Chinese deal getting closer and closer is the word around the street," said Gordon. "We have also a pending breakout here above the $180 level in John Deere. We're trading $179.23 is the old high back in early 2018. It looks like resistance has been broken."

Deere needs to rally another 2% to break above $180. It would mark a new record high.

To take advantage of a move higher, Gordon is buying the $180 call and selling the $185 call for $2.30 or $230 per options spread.

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