Knight Transportation Offers Shaky Geometry Lesson

 | May 26, 2017 | 3:07 PM EDT
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Knight Transportation  (KNX) has been stuck in neutral since December, but some of our technical indicators suggest prices might be going into reverse soon.

Let's kick the tires and check the charts on KNX.

In this daily bar chart of KNX, above, we can see prices have been making a possible equilateral triangle formation since April. We have a low in April and a higher low in May. We also have a high in April and a lower high in May. The level of volume has diminished through the pattern. The flat 50-day moving average line is just slightly above the rising 200-day moving average line. A dead cross could happen soon. The daily On-Balance-Volume (OBV) line has weakened the past two months and the MACD oscillator is below the zero line.

In this weekly chart of KNX, above, we can see prices are holding above the rising 40-week moving average line, but a slight decline will put prices below the line. The weekly OBV line moved higher in the past month as prices moved sideways. What's this selling into strength? The weekly MACD oscillator is in a take-profits mode.

In this Point and Figure chart, above, we can see a pattern of lower highs and equal lows. A trade at $30 should be a downside breakout while strength above $36 will be needed to turn things more bullish.

Bottom line: If you are long KNX, I would suggest raising sell stop protection to a close below $30.

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