Don't Ignore This Chart!

$TRAN Drops To Center Of Channel


The Transport Index is very interesting here.

$TRAN 20140128

The divergence showing on the right hand side marked in blue looks very negative. But on the slope of the transport index, this might just mean a move to the bottom of the channel. Almost all the MACD peaks on the chart are lower than the previous peaks with the exception of November. One thing that makes this chart suspicious is the top of channel blowoff above the channel, and then a quick reversal.

I do notice this is the most abrupt pullback on the chart. Hard to stop the downside momentum after such a quick drop. I would watch for this to test the 7000 level where the last low was made.  Then we can see what is going to transpire. 

Good trading,

Greg Schnell, CMT

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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