NEW YORK (TheStreet) -- Old Dominion Freight (ODFL) and United Parcel Service (UPS) set new highs or their own pushing the Dow transportation average to an all-time high at 7245.43 in intra-day trading on Monday. Five of the eight truckers, rails and freight companies we've been tracking led strength in transports.
The daily chart for the Dow transportation average shows a negative divergence in momentum with a 12x3x3 daily slow stochastic reading at 77.35, moving below the overbought reading of 80.00. The transportation average is above its 21-day, 50-day and 200-day simple moving averages at 7067, 6811 and 6391.
A daily close below the 21-day shifts the daily chart to negative. I consider the new all-time high at 7245.43 as a test of my quarterly risky level at 7205, a level at which investors in the transportation sector should book profits. Note that Tuesday's low at 7096.95 was below my weekly and semiannual pivots at 7126 and 7104. My monthly value level is 6927.
Courtesy of MetaStock Xenith In my last post covering these stocks, Avoid Transports Except for a Trade, I provided my buy-and-trade profiles even though six of the eight stocks had sell ratings according to www.ValuEngine.com. Since then only one stock is lower by 6%, while three had double-digit gains between 11.9% and 17.9%. Today's table shows that seven of eight transportation stocks that I track have sell ratings and one has a hold rating. All remain overvalued with six overvalued by 20.8% to 37.6%. All eight have had positive returns over the last 12 months by 21.9% to 54.0%. All are projected to be lower 12 months from now by 5.2% to 9.4%. One is below its 200-day SMA with seven above, which reflects the risk of a reversion to the mean.
Reading the TableOV/UN Valued: 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.
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