Trains, Planes and Shipping Containers: 3 Transportation Stocks on the Move
For many traders and investors, the idea that the market is led by the transports is more than just stock market folk wisdom. After all, if goods are being shipped and companies from FedEx (FDX) and UPS (UPS) to CSX Inc. (CSX) and Southwest Airlines (LUV) are doing good business, then improvement for the broader economy cannot be far behind.
The same is true for the stocks of these companies, many of which have been making major gains for shareholders over the past several days. Today’s Hot List takes a look at a few of the transportation stocks that might have moved too far, too fast, and could be ready for a reversal in the near term.
First up is Southwest Airlines, mentioned briefly above. In addition to earning “consider avoiding” ratings ahead of trading on Monday, shares of LUV have closed higher for five days in a row, the last three in overbought territory below the 200-day moving average.
Looking at railroad stocks, we have seen a great deal of strength in railroad company Greenbrier Companies Inc. (GBX).
Shares of GBX have been trading in bear market territory since June. Up five out of the past nine days, the stock nevertheless has remained above its 5-day moving average for all nine of those previous trading days. Like LUV, GBX is rallying from its lowest levels of the year.
Lastly, shipping company Alexander & Baldwin (ALEX) is another transportation stock that has made significant gains in recent days. Closing at its lowest levels of the year two weeks ago, shares of ALEX have rallied by more than 16%.
But there are signs that the rally in ALEX may be running out of steam in the short term. Not only has the stock earned some of our lowest “consider avoiding” ratings, but ALEX has closed in technically overbought territory for the past three days in a row.
All three stocks in today’s report were pulled from stock lists available through PowerRatings. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com