Transportation stocks have struggled of late, grossly underperforming the broader stock market indices.
But they may be nearing their time to shine, at least over the near-term. Perhaps even just a bounce. The transportation sector is oversold and divergences are emerging in select sub-sectors such as Airlines stocks.
In particular, I like the pullback in a number of airline stocks as many have reached their rising 200-day average, and are showing momentum divergences. Take for example, Delta Airlines (DAL) and United Airlines (UAL).
This initial leg higher will likely pause into areas where we have the 50-day average but we will get a better feel as the trade develops.
US Airlines ETF (JETS) stock chart
The author or his firm have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
