Transports Could Bounce at Major Support

The Dow Jones Transportation Average (DJTA) sold off more than 1,600 points into February and has now settled near psychological support at 10,000, signaling a potential buying opportunity that is likely to favor direct exposure through the iShares Transportation Average ETF as well as favorably positioned index components. Intermediate upside may be significant, with good odds for new bull market highs.

Components J.B. Hunt Transport Services, Inc. and C.H. Robinson Worldwide, Inc. sit at the top of the group’s relative strength list after the fearsome decline, pointing to resilience that should unpin the next recovery wave. On the flip side, airlines should be avoided after dropping to the bottom of the list, in line with growing fears of a price war. (See also: United’s Growth Plan Sends Airline Stocks Into Tailspins.)

The DJTA undercut psychological support at 10,000 last week and settled above that level, signalling a potential buying opportunity. …read more

Read more here: Transports Could Bounce at Major Support

Category: IYT, JBHT, CHRW

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