AIRLINES ARE LEADING TRANSPORTATION STOCKS HIGHER -- AIRLINE INDEX HITS RECORD HIGH -- DAY'S LEADERS ARE ALASKA AIR, DELTA, AMERICAN AIRLINES, AND JETBLUE -- FEDEX ACHIEVES BULLISH BREAKOUT -- KANSAS CITY SOUTHERN MAY BE CLOSE TO ONE
TRANSPORTS CONTINUE TO GAIN... The daily bars in Chart 1 show the Dow Jones Transportation Average reversing higher today to continue its recent upturn. After finding support at its 200-day average during May, the TRAN rose above a three-month resistance line last week to signal its takeoff. It now appears ready to rise above its late April peak which would add to its upward momentum. The TRAN/INDU relative strength ratio (top of chart) shows the transports starting to play catchup to the stronger industrials (which recently new a new record). That's a good sign for both. Airlines are leading today's transportation rally.
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Chart 1
AIRLINE INDEX HITS NEW HIGH... Airllines continue to lead the transports higher. Chart 2 shows the Dow Jones Airlines Index hitting a record high today. The Airline/SPX relative strength ratio (top of chart) bottomed in March, and may be near an upside breakout of its own. [Falling oil prices may be lending support to the airline rally]. Four of today's top five percentage gainers in the transportation index are airline stocks.
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Chart 2
ALASKA AIR IS DAY'S LEADER... Although it doesn't have the strongest chart pattern, Alaska Air (ALK) is today's top percentage gainer. Chart 3 shows the stock recently bouncing off chart support along its spring 2016 high, and its 200-day moving average (red arrow). It has cleared its 50-day moving and appears to be resuming its long-term uptrend. Other airline stocks are achieving bullish breakouts. Chart 4 shows Delta (DAL) touching a record intraday high. Chart 5 shows American Airlines (AAL) reaching a two-year high. And Chart 6 shows JetBlue (JBLU) on the verge of an upside breakout of its own. [Southwest and UAL recently hit record highs].
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Chart 3
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Chart 4
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Chart 5
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Chart 6
FEDEX AND KSU ALSO LOOK STRONG... A couple of other transportation stocks deserve mention. Chart 7 shows FedEx (FDX) breaking out to a record high. Its relative strength ratio (top of chart) has also turned up. Chart 8 shows Kansas City Southern (KSU) trading at the highest level since last summer. The rail stock appears to be in the final stages of a major basing pattern. A decisive close over 100 would be very bullish development. Its relative strength ratio is rising as well.
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Chart 7
