JB Hunt Transport Services - JBHT - close: 39.96 change: -0.49

Stop Loss: 36.75
Target(s): 40.70, 43.75
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The outlook for our economy and GDP growth in 2011 is improving. If the data continues to back up these positive expectations then transports could be in for a long trend higher. Big picture the transports already look bullish. Short-term the sector looks a little tired and due for a pull back. The action in JBHT actually turned bearish today with a bearish engulfing (reversal) candlestick pattern. Odds are good that JBHT will correct back toward broken resistance and new support at $38.00. A week ago the NASDAQ announced they were removing JBHT from the NASDAQ-100 index and this removal takes place on Dec. 20th. Firms should start selling shares of JBHT to make room for those stocks being added to the index. Nimble traders could try and scalp the decline. I would rather wait to just buy the dip. If triggered we'll start with a stop loss at $36.75.

Trigger to buy the dip at $38.00

Suggested Position: Buy JBHT stock @ 38.00

- or -

Buy the 2011 February $40 calls (JBHT1119B40)

Annotated chart:

Entry on December xx at $xx.xx
Earnings Date 01/28/11 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on December 13th, 2010