Transports Confirm New Uptrend, Now What….Buy’em
- Posted by Greg Harmon
- on September 18th, 2013
In case you were sleeping today let me remind you that the reaction to the FOMC statement and press conference was a face ripping rally across the board. One significant result of this was that both the Dow Jones Industrials ($DJIA, $DIA) and the Dow Transports ($DJT, $IYT) made new all time highs. This confirms the bull market from one of the oldest standing technical views, Dow Theory. So what do you do about it? Well with the transports previously lagging and now moving, why not look to them? Planes, trains, and auto…I mean trucks.
Alaska Air, $ALK, is the best looking plane chart in the index. The chart below shows it approaching a trigger at point B of the bearish Butterfly at 63.60. The Potential Reversal Zone on the Butterfly is all the way up at 72.65 and the Relative Strength Index (RSI) and Moving Average Convergence Divergence indicator (MACD) both support it moving higher.
Norfolk Southern, $NSC, is a good place to start. The chart below shows that it has confirmed a bearish Butterfly Harmonic but with a PRZ much higher at 83. With a move over the B point at 78.20 as a buy trigger it has a lot of room higher with previous price history giving potential resistance at 80.30. The momentum indicators, RSI and MACD both support more upside as well.
CH Robinson Worldwide, $CHRW, is a trucker on the edge of a break out. The chart below shows a third touch at the resistance level at 62 with a gap to fill above it to 65.51. The RSI and MACD are supportive of a break higher as well on this name. Use the break above 62 as a trigger.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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