Eye On Transports
On Friday, investors were wondering how to play the transports after analysts at Morgan Stanley upgraded Burlington Northern to equal-weight and said there is better growth opportunity in the rails than other areas of transportation.
They also upgraded rival CSX which they called the cheapest rail stock of the group.
Is it too early to play transports for a recovery?
Railcar load-ins are down 20%, bristles Jeff Macke. I think the whole space is a fly in the ointemnt for the bulls.
From a valuation standpoint, I’d be careful with the rails, counsels Joe Terranova. They could be ahead of themselves.
Of the two, I’d rather be long CSX than BNI, adds Guy Adami, but it seems to me both are working.
I’d put both BNI and CSX on your radar, says Pete Najarian, but I don’t think you have to jump in today.
You may also be interested to know that on Fast Money’s Halftime Report technical analyst Katie Stockton of MKM said patterns in the chart of the iShares Dow Jones Transport. Avg. ETF appear bullish.
Specifically, she’s spotted the tell-tale inverse head and shoulders pattern and said this ETF could outperform on a pullback in crude.
And she says the railroads look best in the transportation sector.
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Trader disclosure: On June 12th, 2009, 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 (AGU), (USO), (BAC); Najarian Owns (FCX) Call Spread; Najarian Owns (MCD) Calls; Najarian Owns (RCL) Calls; Adami Owns (AGU), (BTU), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (TER), (XBI), (SDS), (BTU), (RIMM); Terranova Owns (X) And Is Short (X) Calls; Terranova Owns (MS) And Is Short (MS) Calls; Terranova Owns (JPM) And Is Short (JPM) Calls; Terranova Owns (POT) And Is Short (POT) Calls; Terranova Owns (BRCM) And Is Short (BRCM) Calls; Terranova Owns (IBM) And Is Short (IBM) Calls; Terranova Owns (HES) And Is Short (HES) Calls; Terranova Owns (GENZ) And Is Short (GENZ) Calls; Terranova Is Short (OIH); Terranova Is Short (RIG); Terranova Is Short (XOM) Call Spreads; Terranova Owns (DIS) Call Spreads; Terranova Is Short Aug. Nymex Crude Oil; Terranova Is Short September Nymex Crude Oil; Terranova Is Short December Nymex Crude Oil; Terranova Owns December 2011 Nymex Crude Oil; Terranova Is Short August Gold Futures; Terranova Is Short July Natural Gas Futures
Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Virtus Investment Partners Owns More Than 1% Of (ABD), (CAL), (CLB), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights