Are Transports Weakening?

Momentum and buying pressure appear to be weakening within transports ($IYT). This is the topic of my TraderPlanet post for this week.

Today we are going to look at the iShares Dow Jones Transportation ETF (IYT). As it’s been trekking higher during 2013, meeting the demands set by its big brother, the Industrial Average, the internals appear to weakening. In January we saw the Relative Strength Index, a momentum indicator, break above 70, then above 80, and almost touched 90 as buyers keep the momentum rolling.

Overbought momentum isn’t necessary a bad thing, it just tells us there is strong forces keeping prices elevated. Price can advance in the face of an overbought RSI indicator. What’s worrisome is when price continue to rise and momentum wanes.

Read the rest: Are Transports Weakening (TraderPlanet)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.

About Andrew Thrasher, CMT

Andrew Thrasher, CMT is a Portfolio Manager for an asset management firm in Central Indiana. He specializes and writes about technical analysis as well as macro economic developments.