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Airlines

LUV: Great accumulation at key level$LUV is showing a great accumulation pattern, right above an older 'Key earnings support' level. We can long at market open risking a drop to 35.40, and aiming for a retest of 39.97 in the intermediate term. This is a good way of leveraging a potential retracement in crude oil to be seen soon, possibly after the next OPEC meeting shows leaders fail to reach an agreement, or if they simply 'freeze' production at record levels (which is the same as sitting on their hands, and maintaining the status quo). Feel free to comment. Also, if interested in learning more about my private tuition and/or trading signals service, message me privately. Good luck, Ivan Labrie.
NYSE:LUVLong
by IvanLabrie
1
Airlines are flashing bullilsh signsHere is another chart sporting a compelling story. A bullish one that is. As my other recent posts, the Dow Jones US Airlines seems to indicate there's still life in this bull market. From its high of early 2015, the index decline in pretty much a textbook flat i.e. an ABC with wave B trying to kiss the high. Then we have near equality between A and C. Another interesting observation, the decline lasted very close to a Fibonacci 13 months or a Fibonacci 55 Weeks. Markets are patterned. In time and shape. You just have to deal with the fact that is rarely clear cut. Actually I think it has to be murky enough for most people to not believe in that theory so they can produce those patterns. The bottom line is the current advance from recent low is impulsive indicating the trend is now up and one as to expect at least 3 waves up at minimum for the airlines are bullish long term until we can count a sequence of 5 waves.
DLong
by yauger
Virgin Airlines: Up or down?Virgin Airlines was a growth stock turned sour. Even with fuel hedging and increase in revenue the market still does not approve VA and hence cause it's decline since it's high at december. Technical: Based on the chart, there are 2 anomalies that one should take note when trading this. 1) Between $30(green line) and $26.42 (blue horizontal line), the price has found support. This is a crucial zone and it is absolutely crucial that you do not enter the trade unless you are very very sure of the fundamentals else you will be catching a falling knife. This is known as the accumulation/distribution phase where thousands of shares are being exchanged with no prior direction. It is also where liquidity is highest and many "big boys" are either unloading or loading up stock. Do check insider transactions for more info 2) The descending triangle is marked by the same support level and a decreasing resistance. Based on bulkowski's formula that sets price target based on probability. I have marked where the predicted price would go. Fundamentals: Simplywall.st did DCF calculations and found it's fair value at around $14. This is close to Bulkowski's formula's prediction. VA is overvalued based on cash flow studies. However based on traditional ratio metrics VA is undervalued. P/E stands at 6.52. PEG stands at 0.26. P/S stands at 0.81 and EV/EBITDA stands at 4.67. They do have quite a bit of debt but their cash flow could easily pay it off. Story: Investors believe oil and the Zika virus would affect sales of this stock heavily and hence they are bearish about it. Would I go long? Yes! Once the price exited the $30 zone. Would I go Short? Also yes!. Only of the price drops below $26.42! Would I do anything now? No! I'm not catching a falling knife. Market is ??? about this stock. So trade after breakouts.
V
by soldierducky
Alaska Air Group - Anatomy of a BubbleAlaska Air Group displays clear characteristics of a bubble, more precisely of a bubble preparing to burst. On the wings of a 6 year old bull market and more recently fueled by cheap oil prices this stock was propelled from 2.53$ in 2008 to 82.78$. The stock rose more then 30x from the low or as Peter Lynch would say, for those that bought it at those prices it became a "30 bagger". With the whole stock market weakening recently and especially the transports coupled with what I think is a bottoming process in crude oil I feel that Alaska Air is slowly losing the air beneath is wings. The technical picture adds weight to this assessment with a daily and weekly RSI divergence (displayed on the chart on the right) plus I think ALK's chart is eerily similar to gold's chart in September 2011. Therefore it is likely that the future development of the chart is going to be similar. I suggest shorting the stock with a weekly stop above 83$. The target is the 40-45 area with partial profit taking around the 60$ area. You may also try and buy a couple of out-of-the-money put options and see if you can catch a potential sharp move down and profit from the tail risk. Be careful though, earnings are on 10/22 so keep your position small and set your stop wide enough so you can weather the volatility. Whoever chooses to go with the trade good luck. For a full list of instruments traded in the lifetime of the portfolio and for performance go to the Performance section: www.highprotrading.com
NYSE:ALKShort
by HighProTrading
Is it going to run out of Fuel? Bearish Bat completionWith the drop in oil prices, $JETS, the new ETF that holds airline companies like Delta ($DAL), American Airlines ($AAL) and southwest airlines company ($LUV) had a very nice rally during the month of July. The $ETF rallied all the way up to the 88.6 Fib level to complete a bearish Bat pattern and declined from there. The pattern's targets are 23.5$ and 23$ which also come with daily support zones. The current price level offer about 1:1 R/R ration for the short position with stop loss above X and 23.5$ as initial target zone. This might work with the bullish scenario I posted earlier for oil
AMEX:JETS
by themarketzone