Stock price when the opinion was issued
This includes all the US railroads as well as the airlines. This has just entered into a period of seasonal strength which continues right through until May of each year. Of greater importance, the transportation sector has started to show signs of outperformance in the last couple of weeks. Has started to outperform the market which is really important at this time of the year. It could get back to the $151 level during this period of seasonal strength.
Seasonally, transportation has done very well from about the middle of October right through until the 1st week in January. This just broke to a new high today, and completed a reverse head and shoulders pattern. On a fundamental basis, lower energy costs are going to help the companies going forward.
Transports confirm the Dow, because if goods are being produced, they have to be shipped somewhere. We’ve had a good run, but the market expected a bit of a correction from August, and this has gone down recently. Doesn’t think that is terminal. Chart shows a big rounded base for 2015-2016 with pretty positive action in 2017. Unless it breaks the lower band of around $160-$164, this is quite constructive and quite positive.
Thinks the sector is going to do extremely well. Oil should eventually go higher and this would impact transportation stocks. He probably likes the ETF better than the individual stocks. He likes it until oil turns to the upside.