Transports Test Major Level
The iShares Dow Jones Transport ETF(NYSE:IYT) has rallied sharply higher from its March 15, 2011 pivot low at $88.90 a share. This morning the IYT is trading higher by 0.59 cents to $95.72 a share. The IYT has rallied higher by nearly $7.00 in just 12 trading sessions. At this time the IYT is trading around its recent double top area from February 18, 2010 which was $96.30. Therefore, this area should be of some resistance in the near term. The IYT is also getting a bit extended on the daily chart at this time. Recently, the transports have climbed higher with the major stock indexes and this is a sign of economic strength in the near term. However, until the IYT clears the double top area at $96.30 traders must not assume that the transports will break out just yet.
Other leading transport stocks that are trading higher this morning are FedEx Corp.(NYSE:FDX) and United Parcel Service Inc.(NYSE:UPS). Should the IYT begin to pullback it would be prudent to expect these transport leaders to pullback as well.