I’m Calling The Top In The Transports

I’m Calling The Top In The Transports
December 08 17:27 2018 Print This Article

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Transportation companies are the engines of the economy, ensuring that producers can get their goods to companies and consumers on demand.  But as the economy slows down and corporate earnings decelerate, less goods will be need to be delivered to companies and consumers. But lets just forget the fundamentals and what we see on the news.  The charts are telling me the top is in on the Transports.  The iShares Dow Jones Transportation, IYT, is exchange-traded fund that is highly correlated to the Dow Jones Transportation Average.  The index includes companies within the trains, planes and auto…I mean trucking sector.  The 22 holdings within the ETF are the following:

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On the monthly chart, we can see negative divergence.

 

On the monthly chart, price broke the up trendline that was established in 2016.

On the monthly chart, last month’s candle was rejected by the trendline.

But the kicker is profitability for the airlines is better than ever.

 

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Yet, thanks to stockcharts.com, according to the Airline Index, $XAL, momentum is decelerating and the chart is showing negative divergence using RSI and the MACD.

Thus, the next step is to look for some stocks in the sector to short, so stay tune.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

 

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rollandthomas
rollandthomas

I'm a retail investor like most of you and learning everyday, but I have been educated and trained to identified the Smart Money on the charts to pick up whatever crumbs they leave behind.

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