In the early 1900s, the Dow Jones Transportation Average (DJTA) was a lot simpler as it was composed entirely of the new transportation of the era -- railroads or rails for short. Over the years, as technology changed, the DJTA changed. Today, the DJTA includes trucking companies, railroads, package handlers and airlines.
Truckers, package handlers and the railroads have been traveling south for months, but the five airlines in the DJTA, which include Alaska Air Group (ALK), Delta Air (DAL), JetBlue Airways (JBLU), Southwest Airlines (LUV) and United Continental (UAL), have plotted different courses.
There may be some controversy over the renaming of mountains in Alaska, but the chart of ALK should provide only bullish discussion:
ALK suffered during the market selloff last week, but it is still climbing to its cruising altitude. In the two-year chart above, ALK is still pointed up. Notice how the two sideways consolidation periods, between $40 and $50 and then between $60 and $70, are followed by upside breakouts and rallies to new highs.
DAL, in the chart above, has leveled off, stuck in a largely sideways $10 trading range since late last year. The parameters are clear for this chart reader -- a weekly close over $50 is likely to prompt another leg higher while a breakdown below $40 could be a technical air pocket.
JBLU has more than tripled in the past two years after breaking out of a six to seven year base. The only chart resistance above the market is from 2003, probably too old to provide any headwinds to this carrier.
Southwest Airlines may be re-routed in the weeks ahead. LUV had an orderly correction this spring of about 33% but notice the heavier volume in the past three months (shown in the bottom part of the chart). This increased volume without much price movement could suggest a stalemate between bulls and bears at least for now.
UAL is also waiting for instructions from the flight tower. After a $25 decline in the first quarter, UAL has held to a relatively narrow $10 trading range. A close above $60 or a close below $50 should spark the next move up or down.