Airline stocks continue to fly…though some are still doing touch and go’s. Check out $AAL, $UAL, $JBLU, $ALK, and more. (August 03, 2015)
XOIL.X USO AAL PANW NFLX AAL UAL ALK HA LUV JBLU UAL AAL
I actually want to look at airlines, but I want to start here (Light Sweet Crude Oil Index XOIL.X). Airlines had been doing really well all the way up until they weren’t, and now these guys are back on the upswing here. I’m not sure, there’s any number of reasons why airlines could be going up. It’s funny, everybody always looks for a reason and the reason typically tends to come after the move is made. So we’re a bunch of analysts looking for meaning in something that’s already happened. That doesn’t make any money, but it sure makes you feel smart.
If we just look at the ETF here, tradable, you can see the USO ( NYSEARCA:USO ) is down at a new low here. I could sound like I know what the heck I’m talking about but actually I don’t, I’m just positing a notion here, that these airlines are starting to perk up, Alaska Airlines ( NASDAQ:AAL ), just because it’s looking like oil is not really going to bounce too much. It looks like the economy is stagnant, welcome to the new recovery. Stagnate doesn’t really mean lower.
Folks are still looking to Janet Yellen the old sage who’s going to tell us when the economy actually is getting better by raising interest rates. So there’s a lot of reasons, most of them are shallow and not particularly robust, but that’s okay, welcome to Wall Street. There are a lot of reasons why we could look at airlines as actually not being a bad place to park money.
The cool thing is, we look at American Airlines ( NASDAQ:AAL ), this has had, hello, can you say retracement? It’s like 30 percent off the top. You compare that to stocks, I’m just spewing them out off the top of my head, Palo Alto Networks ( NYSE:PANW ), there’s basically been no correction. We can go on and on. American Airlines ( NASDAQ:AAL ), these airline stocks have already had these big corrections so they’ve got to be looking more attractive to money managers.
This is a buy, and by the way, all of the earnings, those are in the rear view mirror so there is no potential negative catalyst, or I should say, foreseeable reason that’s going to change the current dynamic. United Airlines ( NYSE:UAL ), also drifting higher. You want to look at Alaska Air ( NYSE:ALK ), I always loved Alaska, particularly in the summer time. On a volatility squeeze, a weekly volatility squeeze, I’ll say it, it could have a $100.00 handle on it, this is a pretty significant move.
After the breakout here you’ve got a 42 percent move. We’ll call it from the breakout to the top here, 42 percent. So if we go, again, from the breakout another 42 percent, I can hardly even get it on here, okay we’ll call it $100.00, so I’ll say it has a $100.00 handle on it. Now I’ve just told you how I would get that price target. A lot of technicians come through with stuff like this and it seems to be kind of mindless more than anything else; drawing lines and then just throwing something out there as if the stock had an opinion of itself.
This is just an issue of traders either buying or selling and as I look at the group Alaska’s ( NYSE:ALK ) good. Hawaiian ( NASDAQ:HA ), not bad. LUV ( NYSE:LUV ) looking good. Jet Blue ( NASDAQ:JBLU ), looking good. So you look at all of these airlines and none of them look so bad that you want to avoid. A lot of them look pretty good like Jet Blue ( NASDAQ:JBLU ) here. And why do they look good? Well because folks are buying them. They continue to buy them even when today was such a lousy day in the market you look at a stock like Jet Blue ( NASDAQ:JBLU ), it was being accumulated.
So I think it’s not too late to get in these stocks. Again, United Continental ( NYSE:UAL ), this has already had a nasty correction. American Airlines ( NASDAQ:AAL ), already had a nasty correction ( NASDAQ:AAL ). So I think this is a place where you can put some money, these are not high momentum stocks. This one, Alaska Air ( NYSE:ALK ), I guess you can say is. Jet Blue ( NASDAQ:JBLU ) is, but generally speaking, airline stocks are just kind of airline stocks; they’re not going to get you excited. But I am really excited about this sector now, because it just continues to move higher. The correction has already been had, now these things are lifting off.
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