Last year, the railway industry weakened on lower rail traffic after the drop in energy prices, notably from oil and coal companies. Over the first 35 weeks 2015, U.S. railroads experienced cumulative volume that was down more than 4% year-over-year. However, the pressures may have already been priced in, and the industry has a number of factors that will help support further growth.
Market observers are optimistic about a cyclical recovery where U.S. consumers and businesses spend more, which would add to increased activity through railways and transportation sectors. Railroads are popular plays among some of the largest investors, including Bill Gates and Warren Buffett. [Sector ETF to Play Warren Buffett, Bill Gates’ Pick]
“Investors looking to buy IYT should place a good till canceled limit order to buy the ETF if it drops to $128.81, which is a key level on technical charts until the end of February. Investors looking to reduce holdings should place a good until canceled limit order to sell the ETF if it rises to $136.24, which is a key level on technical charts until the end of 2016,” adds The Street.
iShares Transportation Average ETF