Transportation
SPX, TRAN and XLI Top down approach/ intermarket relationships Nice recovery at the end of today's session, the medium term support area around 1820 remains intact on SPX.
DJ transportation has almost closed positive today despite the overall market drop. I'm looking at XLI as a possible buy on a short term basis.
Knight Transportation Forms Giant Ascending TriangleKnight Transportation has formed a giant Ascending Triangle (purple) pattern.
The catalyst that can drive this stock higher is that an improving U.S. consumer (as evidenced by earnings beats last week from Amazon, Dunkin Donuts, Domino's Pizza, etc) and improving U.S. economy in the 2nd half of 2015 will push up demand for trucking transportation services.
The forward P/E of 18.5 suggests the company is fairly priced in relation to its earnings. Knight Transportation stock trades with a hot PEG ratio of 1.26 which suggests growth can be purchased at a premium right now.
What I REALLY like about this stock though is that the EPS forecast was just raised.
Source: www.guerillastocktrading.com
Can FedEx Deliver Profits?Based on the EMAs, Resistance 179.69, then down to 144 EMA 175.55 for (1) Support prior to earnings, which can cause a drop to the 377 EMA at 168.17 (Trefis Price 157.-12%) This is an options play set up since the dividend payout is when January Options expire. I'd expect a drop after earnings, then a gradual rise in price before dropping. Gas prices might be breaking record lows to boost profits, but Net Debt drops per share price to $69. Ground Shipment drives up per share price to 137.82. FedEx might integrate Netgas in 2015 that will help the bottom line, but not in the first quarter in 2015. EBITDA margins down from 16.8% to 14.9% (2011) due to increased fuel surcharges; this could be a repeat midway into 2015.
