Dow Transports Turns Positive

NEW YORK (TheStreet) -- Dow Transports continue to the lag the other four major equity averages I track, but last Friday's close was finally technically positive. The Dow Transportation Average is up only 3.5% year to date lagging the Dow Industrial Average, which is up 8.7% with the S&P 500 up 12.8%.

Back on July 25th I wrote On the Lookout for a Dow Theory Sell Signal, which required that Dow Industrials follow Transports lower with a daily close at a new year to date low. Instead, the Industrials rebounded leaving Transports on the off ramp until Friday's positive weekly close. The potential Dow Theory Sell Signal I was tracking has become a Dow Theory non-confirmation.

On Aug. 13, I wrote Trading Industrial and Transportation Stocks where I focused on "buy and trade" strategies for Industrials in the Industrial Select Sector SPDR Fund (XLI). The XLI included several transportation stocks, so today with Dow Transports having a positive weekly chart I am profiling all 20 stocks in the Dow Transportation Average.

Dow Transports are up 31.5% from its October 2011 low at 3950.66 and is down 7.7% from its all time high of 5627.85 set on July 7, 2011. The decline from the all time high to the October 2011 low totaled 29.8%.

Chart Courtesy of Thomson/Reuters

The weekly chart for the Dow Transportation Average shows rising momentum (12x3x3 weekly slow stochastic) and a weekly close above its five-week modified moving average at 5125. My semiannual value levels are 4449 and 4129 with a weekly pivot at 5214 and monthly risky level at 5373.

The above table shows data from www.ValuEngine.com covering the 20 stocks in the Dow Transportation Average.

Reading the Table

OV/UN Valued -- The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating -- A 1-Engine rating is a Strong Sell, a 2-Engine rating is a Sell, a 3-Engine rating is a Hold, a 4-Engine rating is a Buy and a 5-Engine rating is a Strong Buy.

Last 12-Month Return (%) -- Stocks with a red number declined by that percentage over the past 12 months. Stocks with a black number rallied by that percentage over the past 12 months.

Forecast 1-Year Return -- Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Analysis of the Transportation Stocks

Looking at the overvalued/undervalued data six of the transportation stocks are overvalued with Kansas City Southern (KSU) overvalued by 11%. The most undervalued are Overseas Shipholding (OSG), 59.1% undervalued, with United Continental (UAL) 33.8% undervalued.

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