Dow Transports set for a bullish breakout

Rotation, rotation, rotation...

The Dow Jones Transportation Average (DJT) shows bullish rotation (aka leadership) vs. the S&P 500 in November. An upside breakout and retest for DJT vs. the S&P 500 bode well for this bullish shift for the Dow Transports.

Chart 1: Dow Jones Transportation Average (DJT) relative to the S&P 500

This bullish rotation occurs as DJT positions itself for an upside breakout from a July into November basing pattern. A decisive rally above 16,500 would confirm this bullish pattern and favor continued upside back to the late 2025 peaks at 17,676-17,845. Until then, holding the strengthening 13-, 26-, and 40-day moving averages from 16,036 to 15,795 would maintain a constructive bias for the Dow Transports ahead of chart support at the 11/20 low at 15,519.

Chart 2: Dow Jones Transportation Average: Daily chart

Food for thought...

What if DJT is forming a big symmetrical triangle basing pattern dating back to late 2021? Completing this triangle on an upside breakout above 17,600-17.846 (upper triangle trendline and late 2024 peak) is the signal to confirm this longer-term bullish setup and suggest longer-term upside potential to 23,900. Until then, holding key weekly moving average and chart supports from 15,680 to 15,000 would keep the pattern constructive for the Dow Transports.

Chart 3: Dow Jones Transportation Average: Weekly chart