Wednesday, May 27, 2015

TRAN Dow Transports Daily Chart Death Cross

A Death Cross pattern occurs for the Dow Transports with the 50-day MA stabbing down through the 200-day MA. Seasoned technicians do not place a lot of weight on the death and golden (50 piercing up through the 200) crosses but they make for great news headlines. Comically, when a death cross occurs, price usually recovers spiking higher so a move higher in the trannies would be anticipated. The death cross does carry clout, however, since if it remains in play then 2 to 4 months out TRAN would be expected to be lower in price. So after a potential short term bounce weakness should reappear if the death cross pattern holds.

TRAN is at levels not seen since last October seven months ago. Price fails from the red descending triangle which forecasts far lower prices in the future. Perhaps a short term bounce will send price up for a back kiss of the triangle base line at 8600 but weakness would be expected to resume. The trannies have not made new highs to match the Dow industrials over the last few months so the Dow Theory non-confirmation of the stock market rally remains. 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.

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