Conclusion, Investment Implications, Strategy
The iShares Transportation Average ETF (IYT) is currently in an emerging breakout above overhead resistance amid monthly asset expansion and emerging relative outperformance versus the benchmark S&P 500. As long as these positive factors remain true (investors may consider waiting to see if the breakout in the top panel below remains intact on the close), this sets up an emerging low-risk opportunity to buy IYT and the Transportation-related stocks it represents.
Current Sector & Industry Group Ideas
Table 1 below is also accessible via the Sector & Industry Group Ideas rectangle at the top of the Research Center.
Click the table to make it larger
This table also regularly appears in our weekly Keys To This Week: Sector & Industry Groups report published on Monday mornings.
Analysis and Rationale
The upper panel of Chart 1 below plots the iShares Transportation Average ETF (IYT) daily since June 2023 with its 200-day moving average, a widely-watched major trend proxy. The colored highlights show that IYT is breaking overhead resistance at its 267.85 Jly 2023 high today.
The middle panel plots the corresponding total net assets (AUM) in IYT with its 21-day moving average, the latter to identify the monthly (our Tactical timeframe) trend of expansion or contraction. The green highlights point out that these assets have been in a trend of monthly expansion since Jan 19th.
The lower panel plots a corresponding chart of the daily relative performance between IYT and the S&P 500 (SPY) with its 63-day moving average, the latter to identify the quarterly (our Strategic timeframe) trend of relative outperformance or underperformance. The green highlights show that a new trend of quarterly relative outperformance appears to be beginning today.
Together, these metrics suggest a Tactical decision point for IYT from a trend, asset flows, and relative performance standpoint — all which suggest an emerging Tactical long/overweight opportunity,