Price Drop Expected In The iShares Dow Jones Transportation Average Index Fund (IYT)

new etfsTrading Central: From a technical view, iShares Dow Jones Transportation Average Index Fund (NYSEARCA:IYT) has broken below a rising trend line which has been in place since November 2012 and now it is acting as a resistance.

Regarding technical indicators, the daily RSI is capped by a bearish trend line and the daily MACD is pushing below its signal line.

On a relative basis against the IVV S&P500, the iShares Dow Jones Transportation Average Index Fund has pushed below a bullish trend line and looks set for a drop.

Trading strategy:
Short Sell @ $113.30 – Stop loss @ $117.35 – Target @ $105.55

Ratio IYT versus iShares IVV SP 500

UNDER PRESSURE

iyt1

iyt2

MACD: this indicator (Moving Average Convergence / Divergence) reflects a difference between moving averages and refers to the ascendancy or not of the mid-term relative to the short term. The considered average lengths are respectively 26 days (0.075 exponential coefficient) and 12 days (exponential coefficient of 0.15). RSI: (Relative Strength Index) a technical indicator which measures the magnitude of gains over a given time period against the magnitude of losses over that period. The equation is RSI = 100 – 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of RSI periods


For more information on iShares ETF go to:
http://us.ishares.com/home.htm

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