OUTLOOK

"Bullish on Transports"

11/20/2007

We believe the Dow Jones Transportation Average, an index of transportation stocks, is due for a rebound rally.  Within 4 weeks, we expect the index to rally to 4500 or more from its low of 4354.48 on 11/20/07.

As the price of crude oil has increased, transportation stocks have declined significantly as they are highly sensitive to the price of crude oil.  Our system is showing favorable conditions for being long on transportation stocks, given the current valuations and sentiment.  Also, a decline in crude oil prices would benefit transportation stocks and help them rally in the short-term.

Mark Yuan, CFA