It has been a rough year for trucking stocks and most of these stocks are lagging the broader market. A look at the trucking stocks from the Sector Summary shows a handful with SCTRs above 50. The vast majority of SCTRs are 50. The SCTR is the StockCharts Technical Rank (SCTR) and it ranges from zero to one hundred. Notable SCTRs include CH Robison (CHRW) at 78, YRC Worldwide (YRCW) at 58, Heartland (HTLD) at 58 and Landstar (LSTR) at 53. Con-way was not mentioned because it is a takeover candidate. CHRW is clearly the strongest of the group and the stock is currently trading above its August high. Not many stocks can make that claim. My attention was drawn to Heartland because the stock appears to be basing in a key retracement zone and a breakout is within sight.
The weekly chart shows HTLD finding support in the 19-20 area and basing from July to September. Notice that the 2014 lows mark support here and this zone also marks a 50-62% retracement of the prior advance (~14 to ~28). A stock is certainly entitled to a correction or a pullback after doubling and a 50-62% retracement is actually normal for a correction. It fits with the two steps forward and one step backward scenario. The indicator window shows the Aroons at a standoff because they have been equal the last six week, which is a rare event. The first one to cross back above 50 will break the deadlock. On the price chart, look for a move above the July-August high to break resistance.
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--Arthur Hill CMT
Plan your Trade and Trade your Plan
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