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)
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