Shippers Are Following the Trains

• Posted by Greg Harmon
• on May 21st, 2014

Monday I wrote about how the train stocks were ready to break out here. It happened and I am now long Norfolk Southern, $NSC, one of the two names (Kansas City Southern, $KSU the other broke out Wednesday). The transportation sector has been hot. Tonight extends that review and it seems that the shippers may be the next ones to go higher. Let’s take a look at two of them, Fedex, $FDX, and UPS, $UPS.

Fedex has been moving sideways in consolidation since the rapid rise last October. The price action since January has been building a symmetrical triangle that carries a $16 move on a breakout. Since mid April it has made a series of higher lows and higher highs that is about to press against the top rail of that triangle. The RSI is holding in bullish territory and about to move higher with a MACD that is turning back up after a brief cross lower. Look for a move over 140.60 as a trigger.

UPS broke above a slowly rising wedge and is retesting that breakout. The consolidation is holding it at the prior support level at 100.50 from December. The RSI is bullish and the MACD is bullish but flat. The price action has built a Cup and Handle pattern that has a target of 112.30 on a move over the high from last week. with only the prior high form December at 105.37 as resistance. The trigger is over 102.70.

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