Transportation stocks have been stuck in the mud.
Out of the all the industry groups in the S&P 500, transportation names are the worst performing in 2015, down a staggering 16 percent year to date as declining crude prices have weighed heavily on the economically sensitive sector. But according to one market participant who focuses on the charts, a turnaround could soon be on the horizon.
For much of this year, crude oil and transportation stocks have been positively correlated. When the commodity declines, the equities follow, but for Ross, this instance could be different.
"This time around the transports are coming off a double-digit percentage decline and multimonth period of underperformance," said Evercore ISI's head of technical analysis. "This is in contrast to crude's initial decline which coincided with the high in the transports and a multiyear run of outperformance."
And looking at a chart of the , the ETF that tracks transportation stocks, Ross noted the chart is showing signs of a rally. "What I like about the chart is that we've really been improving lately, going from a downtrend to a mini uptrend which is carving out a nice base of support," he said.
Ross noted a bullish "v-shaped" pattern forming on the chart. Technicians often recognize these patterns as a reversal in trend. "The neckline of this pattern comes in around $142 and that also coincides with the 100-day moving average," said Ross, also a CNBC Contributor. "My contention is that we see a break back above the 100-day moving average, with measured move upside back to $162."
A move to $162 is an 11 percent rally from the current price of around $146.50, and puts the ETF within a hair of its all-time high.
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