A key gauge for transportation stocks jumped to a new all-time high last week, but there are still “attractive pre-breakout candidates within transports,” says one analyst.
Railroad operator Norfolk Southern Corp. NSC, +0.91% is “positioned for a breakout above $125 resistance,” while trucking stock Landstar System Inc. LSTR, +1.32% is “nearing an important rally above $90,” wrote Oppenheimer & Co. technical analyst Ari Wald in a note over the weekend.
“The rising trend of each stock’s respective 200-day m.a. supports new highs,” he added, referring to the 200-day moving average, a popular indicator among chart watchers.
Wald offered the graphic below showing what he views as Norfolk Southern and Landstar’s bullish setups.
“Additional upside” is likely for transportation stocks IYT, +1.27% in general, Wald said. That’s after the Dow Jones Transportation Average DJT, +1.24% “rallied to a new closing high last week to reaffirm the Dow Theory buy signal that’s been in place since Nov. 7,” as the Oppenheimer analyst put it.
MarketWatch’s Mark Hulbert noted that the Dow transports “did a very bullish thing” last week, and yet hardly anyone noticed.