Ryder System, Inc.: Facts Don’t Lie, R Stock Is About to Fly

Ryder stockR Stock: Bullish Breakout

I am super excited I stumbled upon Ryder System, Inc. (NYSE:R) stock when I do my daily stock scan because it has a price chart that is simply beautiful. I am equally excited to share my findings because R stock is setting up for a spectacular move.
I could have used the fundamental data on R stock to support my view since it is really appealing. This company that offers transportation and supply chain management solutions is trading at a price-earning ratio of $13.35 and pays a divided yield of 2.42%. A very attractive valuation, but it not this type of valuation that has caught my attention.
I am huge proponent of technical analysis, and R stock has just completed a technical pattern that is indicating that a large price move is now in play. The following Ryder stock chart illustrates the setup I am referring to.


Chart courtesy of StockCharts.com

R stock generated a golden cross in May 2016. A golden cross is a bullish signal that is produced when a faster 50-day moving average (highlighted in blue) crosses above a slower 200-day moving average (highlighted in red). This signal is instrumental in confirming that a bull market is on the horizon. I find it wise to always trade in the direction of this indicator because any ill-timed entry points can be cured with time, as a bullish trend persists.

After the golden cross was generated, Ryder stock began trading within a tight range which I refer to as a consolidation zone. The blue dotted line represents a resistance level that defines this consolidation zone. Consolidation zones are significant because they represent a temporary level of equilibrium between the bulls and bears. It is also an area where these two camps try to gain footing before the next trend in share price develops. It is within these zones that momentum is gathered that will lead to the next trending cycle. This is why when these consolidation zones are finally complete and price moves out of the range, it is referred to as a breakout.


In October 2016,  R stock broke out above resistance, and this indicated that the trading range was complete and now a new trending wave higher is developing.

The following Ryder stock chart illustrates how other indicators were reaffirming this bullish move.


Chart courtesy of StockCharts.com

The accumulation distribution line, in the upper panel of the Ryder stock chart above, is an indicator that uses volume to compute buying and selling pressure. Traders refer to this as money flow. It is produced by cumulatively adding volume on up days and subtracting volume on down days.

This indicator is now at an all-time high, yet the share price has failed to match these highs. This indicator is signalling that the bullish camp has been actively acquiring shares of R stock, and the money flowing into the position is greater than the money flowing out. This is tremendously bullish.

The MACD indicator in the lower panel is a simple and effective trend following momentum indicator. Signal line crossings are used to distinguish between bullish and bearish signals. In early November, a bullish cross was generated, which means that bullish momentum is outpacing bearish momentum and the path of least resistance is towards higher prices.

These indicators support the bullish breakout, and a potential price objective would be the old highs that were set in 2015. $95.00 seems like a far stretch for the price, but the bullish pattern is perfect and the trading signals reaffirm this bias.

Bottom Line on R Stock

I am bullish on Ryder stock and my bias was generated using patterns and signals that were generated on the price chart. As long as the R stock chart remains bullish, so too will my view on this investment.