Mish's Market Minute

Are Transportation Stocks Setting up for Monday?


On Friday, the transportation (IYT) sector made a comeback from this week's lows, along with clearing resistance from its 200-day moving average (DMA) at $249.46. Next, it will need to clear its 50-DMA at $252.16.

A strong transportation sector is important because this sector helps show the economic demand for goods. And with the holiday season just around the corner, we should see an increase in the movement of goods. Therefore, we should watch IYT, along with specific companies that look to be setting up for Monday's trading session.

Here are three symbols that have interesting chart setups for Monday if IYT continues to break through its 50-DMA.

  • United Parcel Service (UPS)
  • Union Pacific (UNP)
  • J.B. Hunt Transport services (JBHT)

Currently, UPS is sitting under resistance from the low of 7/30 at $188.32. With support from the 200-DMA and from recent lows, watch for UPS to clear and hold over its $188.32 price level to prove it can continue upwards.

Next, we have UNP, which closed over its 10-DMA at $201.78 for the first time since August 18th. If UNP can stay over its 10-DMA and hold recent lows, this is another one to watch for a trade entry.

Finally, JBHT offers a low-risk entry with support from the 50-DMA or from recent lows at $165.50. One key point to remember is that IYT will need to clear resistance over its 50-DMA at $252.16. However, if IYT runs into heavy resistance from its moving average, stay cautious, as this could hurt momentum for even the strongest transportation stocks.

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ETF Summary

  • S&P 500 (SPY): Confirmed a bullish phase over the 50-DMA. Watch to continue over 445.
  • Russell 2000 (IWM): Like this over 225.
  • Dow (DIA): 350 next resistance level.
  • Nasdaq (QQQ): 372.76 needs to hold.
  • KRE (Regional Banks): 67 next resistance area.
  • SMH (Semiconductors): 276.69 high to clear.
  • IYT (Transportation): Now it needs to clear the 50-DMA at 252.16.
  • IBB (Biotechnology): Choppy. 168.36 support.
  • XRT (Retail): Flirting with the 50-DMA at 94.82.

Forrest Crist-Ruiz


Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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