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

Record High Transports a Second Chance to Sell

NEW YORK ( TheStreet) -- The Dow transportation average and the Dow industrial average both set new all time closing highs on Tuesday -- 6397.34 transports and 15,056.20 industrials. This provides another Dow Theory Buy Signal, but in my opinion the transportation sector remains rated "avoid-source of funds" and stocks in this sector should be sold.

Transports are up 20.5% year to date vs. 14.9% for the industrials, but the transportation sector is 17.6% overvalued. There are 184 stocks in the transportation sector with only four buy rated stocks and 16 rated hold. With 101 sell rated stocks and 52 strong sell rated stocks, 83.2% of all stocks in this sector are rated sell, thus the "avoid-source of funds" rating for the sector.

In addition to this warning on transports, shows that 65.9% of all stocks are overvalued due to this week's market strength plus the rise in the 30-Year Treasury bond yield to 3.00% from 2.82% a week ago.

It seems like each time we have these signals the market sets a near term top. On March 18 I wrote, 12 Sell Downgrades Threaten Dow Transports and a day later the Dow transportation average set a tradable high at 6291.65 then traded down 6.6% to a low of 5878.12 on April 5.

In today's post I show four additional downgrades to sell; two more railroads and the two air freight companies. Now all eight transportation stocks I have been tracking are rated sell. This gives investors a second chance to book profits in the stocks I profiled today.

Con-Way (CNW) ($34.33 vs. $37.70 on March 18): Missed EPS estimates by eight cents on May 1 earning 19 cents a share. The stock held its 200-day simple moving average at $31.05 on May 2 and the 50-day SMA at $34.65 was tested on strength on May 7. The weekly chart profile shifts to neutral from negative on a close this week above the five-week modified moving average at $34.01. My monthly value level is $32.30 with a semiannual risky level at $39.30 for this sell rated trucker.
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 $28.83 -0.07%
FDX $162.40 -0.48%
NSC $94.59 0.04%
UNP $84.64 -0.55%
UPS $103.16 -0.23%


Chart of I:DJI
DOW 17,815.93 +3.74 0.02%
S&P 500 2,089.09 -0.05 -0.00%
NASDAQ 5,108.22 +5.4120 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs