The essential role that transportation companies play in today’s modern economy became very apparent in 2020. Many traders look back on the year planning how to reallocate their capital in 2021 and beyond, including the transportation sector – including haulage companies, railroads, and long haul trucks and related infrastructure services are likely to have more portfolios in the years to come be. In this article, we’re going to look at some charts from across the industry and try to figure out how traders will try to take advantage of higher movement.
The central theses
- Charts highlight the importance of the transport sector to today’s economy.
- Key stocks of transportation exchange traded funds (ETFs) will likely be the focus of traders in the coming weeks.
SPDR S & P Transport ETF (XTN)
Active traders interested in getting involved in niche market segments like transportation often turn to exchange traded products like the SPDR S & P Transportation ETF (XTN). In the graph below you can see that the price has traded within a defined upward trend since recovering from the sell-off in March.
The latest pause beyond the top Trend line, represented by the blue circle, is used by many traders to mark the beginning of the next section higher up. Based on the pattern below, technical analysis fans will most likely seek to place and then place buy orders as close to $ 66.13 as possible Stop loss orders Depending on risk tolerance and outlook, under USD 60 or USD 55.70.
Hunt Transport Services, Inc. (JBHT)
As one of the top positions in the XTN ETF, J. B. Hunt Transport Services, Inc. (JBHT) is likely to attract the attention of many active traders in the coming weeks. If you look at the following chart, you will see that the stock has traded in a defined range since it peaked in August.
The retracement and the subsequent bounce of the 200 days moving average is of particular interest to active traders as it shows that the bulls are controlling the momentum. The recent break above the upper trendline is likely to be viewed by active traders as the start of a big spike. From a risk management perspective, stop loss orders will most likely be placed below $ 132 or $ 120.70 depending on your risk tolerance and outlook.
Macquarie Infrastructure Corporation (MIC)
As the top holding of the XTN ETF, Macquarie Infrastructure Corporation (MIC) might be of particular interest to active traders. As a provider of aviation fuel, terminal and hangar services for general aviation, the company plays a key role in the transportation sector.
If you look at the graph below you can see that the bulls recently sent the price above that resistance of the 200-day moving average. The rise in momentum has also triggered a bullish transition between the 50-day and 200-day moving averages, known as the golden cross, which is widely used by those in the field of technical analysis to mark the beginning of a major uptrend. Based on this pattern, traders are likely to maintain an bullish outlook on the company until the stock price closes below $ 28.38 or the lower trendline.
The performance of companies in the transportation industry is very sensitive to fluctuations in Corporate profits and the price of transportation services. The main factors influencing business results are fuel costs, labor costs, demand for services, geopolitical events, and government regulation. Many of these factors are interrelated.
The bottom line
2020 brought the role of certain sectors such as transport to the fore. As active traders try to reallocate their capital in 2021, the charts discussed above will likely continue to be a factor in causing many to move capital to the various transportation companies.
At the time of writing, Casey Murphy did not hold a position in any of the named assets.