Thursday, May 29, 2014

TRAN Transportation Index Daily Chart New All-Time Record Highs

The trannies keep running higher to a new all-time intraday high at 8102.44 and all-time closing high at 8075.88. The weaker euro yesterday strengthened the dollar which sent oil weaker and transportation stocks higher (but broad market lower). The airlines continue to feel love but they are flying way too high where the air is far too thin. TRAN shows a parabolic move higher over the last couple weeks. The neon blue lines show how price makes these strong vertical moves and then retracts back to the middle standard deviation band, the 20-day MA now at 7820, and rising.

The MACD line is long and strong wanting another higher high after any near-term pull back. The RSI will likely sneak into overbot territory as well so there is a bit more juice available, but not a lot. The volume is not impressive for the strong move higher. Price is extended above the moving averages and upper band so a move down to revert ot the mean is a reasonable expectation.

From a Dow Theory perspective, higher highs in trannies and higher highs in the Dow were the norm in 2013 to end the year. The trannies made a higher high in January but the Dow could not. The downtrend was strong in January but the bulls push TRAN higher to new highs in March. The Dow continued to struggle and was unable to confirm the trannies until May where both the Dow Transports and Dow Industrials are making new highs. This confirms the uptrend from a Dow Theory perspective. Alas, the drama continues since TRAN keeps printing new highs but the Dow once again lags. The bulls need to pump the Dow higher to new all-time highs so it can continue to confirm the market rally. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.