The Dow Jones Transportation Average (DJT) and Dow Jones Utility Average (DJU) indexes are often seen as leading indicator of the overall stock market. With that in mind, let’s analyse the technicals of each index.
The Dow Jones Transportation Average (DJT) is a stock market index of the American transportation sector. Price last traded at $7957.
Let’s review just the bigger picture using the quarterly and monthly charts.
DJT QUARTERLY CHART
The horizontal line denotes the 2008 high and the recent low came in well above that level indicating strength in the uptrend.
The Bollinger Bands show the middle band providing support. Price dipped a bit below this band but immediately reversed back up bullishly. There may be a bit more work to do around this middle band before price heads back up to the upper band and new price highs.
I have drawn a Fibonacci Fan from the 2003 low to 2008 high. And we can see the recent low was bang on support from the 50% angle. I now expect the uptrend to make its way up to the 23.6% angle and price may end up just crawling along that angle into the final high. Let’s see.
The RSI showed a new high at the previous price high and I now expect new price highs to set up a bearish divergence here.
The MACD indicator is bearish so caution needs to be heeded.
DJT MONTHLY CHART
The Bollinger Bands show the recent low traded well below the lower band which is often seen at important lows. Price is now back at the middle band and I am looking for resistance to come in here and send price back to the lower band to set up a higher low.
I have drawn a Fibonacci Fan from the 2009 low. It shows the 2014 high at resistance from the 50% angle. Price subsequently traded back down breaking below support from the 61.8% angle with the recent low just above the 76.4% angle. The next challenge will be to get back up to the 61.8% angle which will now act as resistance.
I have added Fibonacci retracement levels of the move up from 2009 low to 2014 high and the recent low clipped the 38.2% level which keeps the overall bull trend in a strong position.
