Conclusion, Investment Implications, Strategy
Old Dominion Freight Line, Inc. (ODFL) appears to be resuming its larger 2020 advance following two months of sideways investor indecision. A sustained rise above the $199.90 area would target an additional 14% rise to $234.00 per share.
Analysis and Rationale
Old Dominion Freight Line, Inc. (ODFL) operates as a less-than-truckload (LTL) motor carrier in the United States and North America. It provides regional, inter-regional, and national LTL services, including expedited transportation. The company also offers various value-added services, such as container drayage, truckload brokerage, and supply chain consulting. As of December 31, 2019, it owned 9,296 tractors, as well as operated 236 service and 42 maintenance centers. Old Dominion Freight Line, Inc. was founded in 1934 and is based in Thomasville, North Carolina.
Chart 1 below plots ODFL daily since April, highlighting its Nov 5th breakout higher from two months of sideways investor indecision. A sustained rise above the upper boundary of the indecision area, currently at $203.66, would confirm the breakout and target an additional 14% rise to $234.00 per share.
ODFL has maintained a statistically significant and stable positive correlation to the benchmark S&P 500 (SPX) throughout the past 25 years, most recently 0.86 over the past 3 months. Per the correlation, as goes ODFL from here so is likely to go the US broad market.
Chart 1
Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $199.90 area, a long entry price of $206.14 would provide a 1:4.5 risk/reward ratio (risking $1.00 to make $4.50) with an initial risk of 3.0%.
Table 1
Click Here for a table containing all of our current stock, ETF and index ideas.
Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.