Dow Jones Transportation Extremely Overbought
Igor Rakhmanov | Jun 03, 2014 12:42AM ET
Today the Bullish Percent Index of the Dow Jones Transportation Average (TRAN) has reached the maximum reading of 100. It means that all constituents of the index are on a buy signal on their Point & Figure charts. Though this reading speaks about strength in the TRAN, it also indicates the extremely overbought conditions. It is a rare event which is happening the third time over the last ten years. In two previous cases it put a lid on the TRAN and the index retraced to its monthly EMA (20). Note that the index can continue to rise for a while before giving ground.
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