NEW YORK (TheStreet) -- Investors with positions in trucking stocks should reduce holdings by 50% as the Dow Jones Transports is being hit hardest by the stock market drop. Four truckers -- Knight Transportation (KNX) , Landstar System (LSTR) , Old Dominion (ODFL) and Saia (SAIA) -- are outperforming the industry, and solid year-to-date gains can still be taken.

When the stock market seems to be in correction mode, investment strategies shift from buying weakness to selling strength. That's particularly true today with the trucking industry. Here's how to trade these stocks now.

The Dow Transportation Average was the year-to-date upside leader among the major averages up 18% at its all-time intraday high at 8,714.94, set on Sept. 19. At Thursday's close, the year-to-date gain has been cut to 8.8%, with transports down 7.6% from the high vs. declines of 4% for Dow Industrials (DIA) , 4.5% for the S&P 500 (SPY) and 5% for the Nasdaq (QQQ) .

A recent report by the American Trucking Association says that the improving economy is increasing truck traffic and that jobs are available for truck drivers. If the ATA is correct, trucking companies should report solid earnings for the third quarter. This supports the strategy to reduce holdings now given the correction and on strength that may occur from lower levels if a company beats analysts estimates.

Here's the table of key information for eight transportation stocks.

Investors should look at this table as its shows the year-to-date gain or loss for eight trucking stocks. Don't be blind-sided by earnings volatility, as this table shows the date of each earnings report, analysts' earnings-per-share estimates, as well as whether the company reports before the opening bell or after the closing bell. (N/A means not available.)

Investors should consider using "good 'til canceled" limit orders to sell strength to one of the moving averages shown in red, as that stock is below that average.

Con-Way (CNW) , JB Hunt (JBHT) and Landstar are members of the Dow Transportation Average. Landstar has a year-to-date gain of 15% out-performing the average which justifies reducing this holding by 50%.

Investors should reduce holdings by 50% to lock in year-to-date gains on Knight Transportation (up 45%), Old Dominion (up 27%) and Saia (up 48%).

Let's look at the daily chart for the Dow Transportation Average.

Courtesy of MetaStock Xenith

The Dow Transportation Average crossed above its 200-day simple moving average (green line) at 5,110 on Dec. 10, 2012, beginning the rally to the Sept. 19, 2014, all-time intraday high at 8,714.94. The transportation average has been below its 50-day SMA (blue line) at 8,380 since Oct. 7, which indicates risk to the 200-day SMA at 7,877.

The weekly chart for Dow Transports is negative, confirming a significant correction. 

Courtesy of MetaStock Xenith

The down trend at the left is the "crash of 2008," which began after the transportation average traded as high as 5,537 in May 2008. A correction back to this high from the Sept. 19 high would be a 36% decline.

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

 TheStreet Ratings team rates OLD DOMINION FREIGHT as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate OLD DOMINION FREIGHT (ODFL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

You can view the full analysis from the report here: ODFL Ratings Report