The NASDAQ Transportation index is currently performing one of the stock market’s favorite pastimes, converting former resistance into support.
If you only understand this one tenant of technical analysis, you will be a long way towards better risk management and position entry.
In early December the TRANX.X broke up through prior all-time highs. Since then price has retraced, right back down into the prior resistance. Low-and-behold, a bid is present:
The index made a powerful move out of consolidation in November, declaring a definitive and explosive victory for bulls. Going forward, we need to monitor whether or not investors become initiative, allocating more funds to the economically sensitive industry-group as the year matures. So far, bulls remain in control.
BULLISH
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