This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Transports Shift Into Fast Lane

NEW YORK ( TheStreet) -- Back at the market lows of Nov. 16 the Dow Transportation Average traded as low as 4838.10, and a close that day below the June 4 closing low at 4847.73 would have been what market technicians call a Dow Theory Sell Signal. This signal was averted as trucks turned on a dime, trains switched direction and the air freighters took flight. Nov. 16 was the day of optimism that the fiscal cliff would be avoided.

On Thursday, Dow Transports traded as high as 5358 30 and a close above the Feb. 3 closing high at 5368.93 would have been a Dow Theory Buy Signal. This did not happen as a pre-Christmas compromise on a deal to end the fiscal cliff was not achieved.

The Transportation sector is not cheap as shows that this sector is 10.3% overvalued after a 10.75% rally from the Nov. 16 low to the Dec. 20 high. Railroads and truckers are less overvalued by 2.9% and 2.6% respectively. One of the two major air freight stocks is undervalued by 8.7%. Today I profile six transportation stocks that are buy rated according to ValuEngine.

On Aug. 28 Transport Stocks Hit Speed Bump when the Dow Transportation Average was trading at 5073.48, I profiled the 20 stocks in the Dow Transportation Average. In my profiles today, I include five that are in the Dow Transportation Average. Today with the transports higher at 5340.80 we find that both railroads I track are lower than on Aug. 28, the trucker is higher, and the air freighters are mixed.

Chart Courtesy of Thomson/Reuters

The daily chart above shows the Dow Transportation Average (5340.80). Note that momentum (12x3x3 daily slow stochastic) reading is extremely overbought at 96.64, well above the 80.00 overbought threshold. The 50-day and 200-day simple moving averages at 5102.55 and 5115.60 are supports. The weekly chart (not shown) is positive with the five-week modified moving average at 5137.85 with the 200-week SMA at 4547.45. This week's value level is 5211 with my quarterly risky level at 5541.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CSX $27.27 -0.37%
FDX $165.11 -0.33%
JBHT $82.88 -2.14%
NSC $90.11 -2.03%
ODFL $66.05 -0.84%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs