After slumping last year, the iShares Transportation Average ETF (CBOE: IYT) and transportation stocks are surging to start 2019. IYT, which tracks the Dow Jones Transportation Average, is up nearly 5% to start the new year, but some market observers are advising a cautious approach to transports.

Transportation stocks were expected to benefit from lower oil prices and while that has been the case for airline stocks, other industry groups represented in IYT, including railroads.

“A drop of at least 30 percent in the railroad stocks would take the S&P industry down to levels not seen since the beginning of 2017. A 20 percent decline in the air freight and logistics industry would bring it to late-2013 lows,” reports CNBC.

The $604.67 million IYT allocates over 30% of its weight to railroad stocks, its largest industry weight.

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