Transportation Gets Boosted While Retail Fumbles
Michele Schneider | Feb 02, 2022 11:50PM ET
Tuesday, the transportation sector via iShares Transportation Average ETF (NYSE:IYT) gapped higher on earnings from one of its top holdings, United Parcel Service (NYSE:UPS). Beating earnings per share estimates by 6.5%, UPS was able to bring IYT back over both its 200-Day moving average and 50-DMA. IYT has now confirmed a bullish phase change as of Wednesday's close over the 50-DMA.
However, while the movement of goods is showing that economic demand is holding, the retail space continues to stumble within its current trading range.
If we narrow our focus down to how these two sectors interact with each other, we can look for correlation from demand picking up in IYT to potentially seeing retail companies begin to follow in IYT's footsteps as consumers order more items, thus increasing the movement of goods.
With that said, what are the key areas to watch for each symbol to hold if they support this idea?
Looking at the above two charts, first, we can watch for IYT to hold its bullish phase change over the 50-DMA at $267.32. However, if IYT pulls back to digest its large move upwards, it should ultimately hold over the 200-DMA at $262.
On the other hand, the retail space [SPDR® S&P Retail ETF (NYSE:XRT)] is stuck between resistance at $83.29 and support at $75.62.
Therefore if, IYT can hold over its major moving averages, watch for XRT to clear its current trading range and hold over $83.29 before looking for the next push upwards.
h2 ETF Summary/h2- S&P 500 (SPY) 461.45 to clear.
- Russell 2000 (IWM) 203.55 to clear.
- Dow (DIA) Watching for a second close over the 50-DMA at 355.29.
- NASDAQ {QQQ) Held the 200-DMA at 366.19.
- KRE (Regional Banks) 72.27 pivotal area.
- SMH (Semiconductors) 287.73 resistance.
- IYT (Transportation) Confirmed a bullish phase change.
- IBB (Biotechnology) Watch to hold over the 10-DMA at 129.37.
- XRT (Retail) 83.54 resistance.
- Junk Bonds (JNK) 106.48. resistance.
- SLV (Silver) Watching to clear the 50-DMA at 21.15.
- USO (US Oil Fund) 58 support with minor support from the 10-DMA at 61.56.
- TLT (iShares 20+ Year) 140 support.
- DBA (Agriculture) Watch to hold over 20.37.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.