Friday the transportation sector, via iShares Transportation Average ETF (NYSE:IYT) made a comeback from the week’s lows along with clearing resistance from its 200-Day moving average (DMA) at $249.46. Next it will need to clear its 50-DMA at $252.16.
A strong transportation sector is important because this sector helps show the economic demand for goods. And with the holiday season just around the corner, we should see an increase in the movement of goods. Therefore, we should watch IYT along with specific companies that look to be setting up for Monday’s trading session.
Here are three symbols that have interesting chart setups for Monday if IYT continues to break through its 50-DMA.
Currently, UPS is sitting under resistance from the low of 7/30 at $188.32. With support from the 200-DMA and from recent lows watch for UPS to clear and hold over its $188.32 price level to prove it can continue upwards.
Next, we have UNP which closed over its 10-DMA at $201.78 for the first time since Aug. 18. If UNP can stay over its 10-DMA and hold recent lows this is another one to watch for a trade entry.
Finally, JBHT offers a low-risk entry with support from the 50-DMA or from recent lows at $165.50.
One key point to remember is that IYT will need to clear resistance over its 50-DMA at $252.16. However, if IYT runs into heavy resistance from its moving average, stay cautious as this could hurt momentum for even the strongest transportation stocks.