The bull market has fueled strength in the transport sector in May, but as Greg Harmon of Dragonfly Capital takes a technical look, he sees eight trucking stocks that are running out of gas.
According to finviz.com, there are eight trucking stocks that have valued their companies above $1 billion. Heartland Express (HTLD), Knight Transportation (KNX), Werner Enterprises (WERN), Con-Way (CNW), Swift Transportation (SWFT), Landstar (LSTR), Old Dominion Freight Line (ODFL), and JB Hunt (JBHT). That is a lot of money in trucks. But each and every one of them looks like they are either out of gas or running on fumes right now. Let’s look at a few.
Werner Enterprises (WERN)
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Werner Enterprises (WERN) is the best of the bunch and just might make it to the truck stop in time to fill up. The price is butting against resistance at 25.25 but the relative strength index (RSI) is rolling over and the moving average convergence divergence indicator (MACD) is pulling back at levels that have signaled a top previously. It is also extended from the simple moving averages (SMA) and the 23.50 long-term support/resistance line. All that said, if I had to own one trucking stock, this looks the best. Swift Transportation (SWFT) has a similar chart and is a close second.
Knight Transportation (KNX)
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Knight Transportation (KNX) did a full retracement to the 200-day SMA after the bearish shark. But then came back with a vengeance…until the shooting star print two weeks ago. Since confirming lower, it has been falling back again and the RSI and MACD are leading it lower. A bit more advanced than the first two names above, there is support lower at 16.70 and then the 15.60 area. Con-Way (CNW), Heartland Express (HTLD), and Old Dominion Freight Line (ODFL) charts have a similar look.
Landstar (LSTR)
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Landstar (LSTR) looks so bad it might be turning good, if that makes sense. It has had a steady broad pullback since January 28, but is now consolidating at the 200-day SMA. It is not time to jump in yet as this could just be a bear flag before the next leg down, but a rebound back over 53.25 would be a sign that things are looking up. JB Hunt (JBHT) is racing to get to that bottom as well.
By Greg Harmon of Dragonfly Capital
