Transportation Stock Indices Send Bullish Message About Global Economy
Chris Kimble | May 04, 2021 11:24AM ET
Transportation-related stocks tend to be economically sensitive. So it was no surprise to see them fall sharply last March as the COVID-19 coronavirus gripped our news and nation.
But since bottoming last year, the Dow Jones Transportation Average and Baltic Dry Shipping Index have moved sharply higher. And this may be sending a bullish message about these stocks (and the global economy).
As you can see in today’s chart 2-pack, both indices are breaking out above their respective long-term “monthly” trendlines at each point (1).
In the case of the transports, it’s a breakout above overhead rising resistance (indicating a very strong move as long as it holds). In the case of the shipping index, it is breaking out above a confluence of lateral resistance and its falling overhead trendline (this will signal a change in trend as long as it holds).
In any event, the price action continues to reflect strength in the global economy! Bulls want these breakouts hold. Stay tuned.
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