AAL LONG American AirlinesAAL is shown here on a one hour chart with anchored VWAP bands shown.
The anchoring is set for the beginning of the year. Based on the price action
drawn in are support and resistance zones. When price is one or more standard
deviations below the mean VWAP, the stock is undervalued and institutional buyers will
set buy orders. ( Short sellers will close there position to provide shares to
the buyers and take their profit off the table
(When the price is one or more standard deviations above the mean
VWAP, the stock is overvalued. Institutional sellers will sell their shares ( either
shares at a profit or short sell )
At present price, action has retreated to the upper part of the support zone.
AAL is getting to a buying point.
The relative volume indicator shows huge increases in volume compared with the
rolling average volume of the past 50 days. Essentially current volume is 10X
that average meaning there is extreme interest in this stock and great liquidity.
Fundamentally, AAL has had two prior quarters of earnings reports and the upcoming
earnings could be fueling volatility and potential price surge.
I see this as reversal setup for great entry for a 45-60 DTE call option at or in the money or a
long swing trade targetting just below the resistance zone or one standard deviation
above the VWAP.
