Don't Ignore This Chart!

$TRAN Drops To Center Of Channel

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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

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he 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 Market Technicians Association (MTA) and the International Federation of Technical Analysts (IFTA).

Greg is also the co-author of Stock Charts for Dummies (Wiley, 2018). Greg joined StockCharts.com in 2012 and has be instrumental in helping launch a variety of new blogs and other commentary platforms. Presently, Greg contributes market analysis commentary to The Canadian Technician, Commodities Countdown and Don't Ignore This Chart blogs. Learn More
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