As the stock market correction deepens, trucking stocks — like Covenant Logistics (CVLG), PAM Transportation (PTSI), Marten Transport (MRTN), Heartland Express (HTLD) and Knight-Swift Transportation (KNX) — are holding up well.
IBD’s Transportation-Truck industry group was on pace for solid gains this week, even as the Dow Jones Industrial Average hit a new 2022 low. That relative outperformance can be illustrated by the trucking group’s climb in IBD’s Industry Group Rankings.
Six weeks ago, the industry group ranked No. 48. Now, it is ranked No. 16 out of 197 groups.
During market corrections and uptrends, investors should typically focus on the leading stocks in the top 40 industry groups. It is important for investors to put this downtime to good use.
Now is an ideal opportunity to study market bottoms and build a strong watchlist of top-performing stocks. Many long-term leaders tend to break out at or near the upside follow-through day, which can be a potent market-bottoming signal.
Missing that early opportunity can be a costly mistake.
Trucking Stocks: Covenant, PAM, Marten, Heartland Express, Knight
Tennessee-based Covenant Logistics is below its 50-day line, as it forms a base with a 34.90 buy point. Look for a strong retake of the 50-day line to indicate further gains on the right side of the base.
Covenant’s earnings and sales jumped 70% and 24%, respectively, vs. the year-ago period. As a result, the stock boasts a perfect 99 IBD Composite Rating, making it the No.1-ranked component in the industry group, per the IBD Stock Checkup.
Trucking stock PAM Transportation remains below its 50- and 200-day lines despite solid gains this week. The stock is building a base that has a 37.55 buy point.
The relative strength line is close to hitting a new high. This line, which measures a stock’s price performance vs. the S&P 500, is a key technical indicator during weak markets.
Following a 22% drop in early September, Wisconsin-headquartered Marten is rallying up the right side of a new base.
For now, the stock’s correct buy point is 23.53. But keep an eye out for a more-optimal entry, as the base continues to take shape.
Heartland Express is tracing a cup with handle with a 17.06 buy point. Its RS line is at new highs.
Knight-Swift is about 20% off its 52-week high, even though the RS line has lifted to new highs. Shares are trying to find a bottom as they build a base with a 57.68 buy point.
A decisive retake of the 50- and 200-day lines would be bullish for the stock’s base-building prospects.
In the most recent quarter, earnings and sales growth rose 44% and 49%, respectively, year-over-year.