TRAN Transportation Daily Chart Bear Flag

The trannies helped forecast the August-September sell off since the Dow Theory non-confirmation occurred, then failure. The negative divergence at the early July top was a dead giveaway as well. The pink lines show the bear flag currently in play. The two day rally has brought price back up towards the 20 MA, watch this closely. Currently, on the weekly chart, price is testing the 200 week MA ceiling at 4324. RSI, stochastics and money flow are all below their 50% levels which is bearish.

The projections for the pink bear flag would be; first leg from 5450 to 4200, a difference of 1250, thus, after the consolidation flag, if the second leg began at 4700, then 4700-1250= 3450 target. Using 5600 as a top would yield a 3300 target. Support exists below at 3600, 3550, 3300, 3100 and 3000. Thus the targets would match up with horizontal support in the 3300 to 3550 zone.

Projection is for the bear flag to play out in the weeks and months ahead with price targeting 3000-3600, more specifically 3550, then 3300. A game changer would be if price can move back above the 20 day MA at 4375-ish over the next few days. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.

Note Added 10/6/11 at 9:12 PM EST: Price moved above the 20 day MA today so the TRAN bulls are emboldened. Continue to watch price behavior in relation to the 20 day MA (4422 vs. 4371) and the 50% levels for RSI, stochastics and money flow. RSI and stochastics both moved a smidge above 50 today, keep watching.