GO
Loading...

Test This Theory

The Dow Jones Transportation Average and the Dow Jones Industrial Average both made fresh- highs Friday, a classic bullish sign for investors who follow the charts. What does it mean going forward?

Dan Fitzpatrick is Co-Contributor and Technical Analyst for TheStreet.com as well as President, StockMarketMentor.com. Following is a summary of his main points.

Is this a clear buy signal?

Yes, providing we see more volume and if we see the Dow Industrials test their break-out. Also we need the iShares Dow Jones US Financial to make new highs because that’s a larger percentage of the DJIA than it used to be.

rong>


What’s our next stop higher?

It could be 14,000. If this is a buy signal the shorts will start buying to unwind their trades, theorizes Fitzpatrick.

Are the transports a good tell for the end of recession?

They usually are, replies Fitzpatrick. My rule of thumb is six months. If we get that break-out, I would look for a pick-up in the economy toward the end of this year.

I think the “tell’ in transports is FedEx, says Guy Adami. The stock could trade at $100 by the second half of the year. And I also like UPS for the second part of ’08.


______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to fastmoney@cnbc.com.

Trader disclosure: On Apr. 18, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (INTC), (MSFT), (YHOO); Najarian Owns (AAPL), (AMR), (BIIB), (CSCO), (MSFT), (NOK), (TSO), (XLF), (YHOO), (ETFC), (EMC), (NVS); Najarian Owns (BKC); Najarian Owns (BHI) Calls, (BSC) Calls, (COP) Calls, (DD) Calls; Finerman Owns (GS); Finerman's Firm Owns (JCP), (MSFT), (NOK), (PZN), (TSO), (VCLK), (VLO), (YHOO), (GE), (NOK); Finerman's Firm Owns (FNM) Calls; Finerman's Firm Is Short (COF); Charles Schwab Is A Sponsor Of "Fast Money"; GE Is The Parent Company Of CNBC

Fitzpatrick Owns (BNI), (X), (RIG), (ACI), (MON), (POT), (TRA)

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report

  • Bill Nygren, Oakmark Fund, explains why Apache, Bank of America and Google will be winners in 2015.

  • Nick Tiller, Sustainable America founder and chairman, tells CNBC's Kate Kelly oil prices are poised for a tradable rally. Tiller likes the Brent ETF and energy sector.

  • Discussing interesting trends contributing to the market's rally into year's end, with the FMHR trader Josh Brown and Dan Greenhaus, BTIG.