As I noted last night, earnings season is a great time to have some extra cash on hand to survey the landscape. Although it does officially kick off until Monday evening, we are seeing some bets being placed in certain sectors. The transportation sector has an excellent chart and has earned my respect and deserves your attention.
This is the kind of chart for an entire sector that you love to see. It shows great breadth. However, I am seeing a big reason for the trannies breaking out is due to strength in particular with the shippers. As far as individual issues, you want to go for best in breed. Many shipping stocks have been building towards a multi quarter resolution within a massive pennant. I am told by some of the more brilliant gentlemen inside The PPT that the shipping company with the best management is $GNK.
Even if it does not BTFO, the stock still looks good for a long swing trade in its trading range. However, with the trannies at large breaking out, and seasonality at play, this could be the big move up. I like the risk/reward profile here.
If you want to some more gamboool, $DRYS has a Greek riverboat feta cheese gambler as a CEO, but it trades with an extremely high beta and is also rumored to be a takeover play.
Many other shipping stocks also have the same multi month pennant chart pattern as the two stocks above, such as $PRGN, $EGLE, $SB and $DSX. I will be stalking these names for the rest of today to look for follow through by way of volume coming in and of course strong price action until the close. If I pull the trigger on any of these names I will update my post.
Again, nothing has changed since last night. I still think you should have some more cash than usual on hand going into earnings season next week. However, that is not a reason to become lazy and miss great opportunities.
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