Seems the $TRAN is overextended on the daily chart. Also looking at the daily chart of crude oil, it seems that its set to find support in the erea from July. Companies like YELL and such may soon look like good short candidates....at least for the time $TRAN pulls back.
To short on a guess that something is overvalued is financial suicide. Value is not what makes a stock, etc fly. It is "perceptions" that count. What do the mkt players think? What causes bubbles? Value or perceptions of a tulip bulb going even higher. I think some call "perception" the greater fool theory... Picking tops/bottoms without a technical setup is also not cool.
I have no idea wether YELL is over valued or not. Thats not how i trade. All i know is that today the transportation index had a bearish red candle that pierced deeply into the prior days bar. That in itself is not enough for me to short...but the $TRAN & $TRANQ index have had a huge run up in a very short time. They are extended from the 20ma on the daily charts.... a Fib. retracement to at least 38% (which would take it to the area of minor support from Nov 3 -6) is very likely after such a steep incline. But also as i look at crude oil ...its now beginning to find support here from July and most likely will have a minor bounce back up.....which in turn would take transports down. YELL has been underperforming the transports. So after todays action im short YELL. YELL also up against major suppy area on the weekly chart .
lilduckling nothing for or against your picks. I mostly critique in general terms about technical trading. I try not to judge your picks....not my place to do that.... personally, i like yellow, a well run union company, a good example of where "UNIONS" are not detrimental to a companies financial well being ...and also the well being of the workers family .....
I understand..... i'm bearish for only short term ( 2-3 weeks). It is possible that YELL might only fall to last week's base...and trend side ways till it meets the 20ma.... in which case i will cover. Yell basing sideways into the daily 20ma would look to me that a blast up trough the 200ma will be likely.