Transports have tumbled this year.
The IYT transportation ETF is down 25% in 2020, tracking for its worst year on record. Airlines have led the decline as coronavirus lockdowns shut down domestic and international travel.
Ari Wald, head of technical analysis at Oppenheimer, sees markets improving but does not expect transport stocks to catch up.
"We think a new bull market is underway and transports are at least attempting to bottom, but there are two concerns that keep us away from this industry," Wald said on CNBC's "Trading Nation" on Monday. "One, the tracking ETF can be considered damaged below its December 2018 low at $156."
"Two, we think it's quite telling that transports underperformed into their initial January peak. They underperformed into the March low, and they're still underperforming on this market snapback," said Wald.
While the S&P 500 has bounced 34% off its March low, the IYT ETF has risen 25% from its own. It is still 28% below its January peak.
Freight and logistics company UPS is down 20% this year, while Old Dominion has climbed 23%.
Gina Sanchez, CEO of Chantico Global, is also wary about the group.
"It's hard to be opportunistic in this sector. The outlook was quite negative even before the crisis, because we were going into a natural slowdown, trade had already rolled over and you normally see transports follow that. So, I think the outlook, even before this crisis was bad and given this crisis, it has gotten worse," Sanchez said during the same segment.
The IYT ETF fell more than 1% on Monday, while the S&P 500 ended flat.