Are the Airlines Ready to Take Flight? Weakness in Crude May Provide the Catalyst
Airlines have caught a bid lately, with United and Spirit trading at 52-week highs. Alaska, American and JetBlue are above their 50d moving average. Only Ryan Air and Southwestern remain below the 50d. The weakness in crude oil is assisting the industry at a time when most airlines have shown a tendency to rally. The group usually bottoms in the late-summer and then rallies November and December as traffic builds into the holiday season.
Airlines – Taking Flight
Watch for analyst upgrades, as many are watching the group as a whole. Monitor the key players this week for follow-through into year-end strength.
We are open to starting new positions, looking for confirmation as American moved above its 50d, led by United and Spirit Airlines.
The indices would be a big help as we look forward to a year-end rally. Any strength in the equity markets will be a huge tailwind for airlines, so we will take a measured approach entering new positions.
If the group continues together and crude weakens, we should see a repeat of the seasonal pattern.
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Happy Trading,
Vinny
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