Here a.re a couple of airline stocks to ride. Check out Jetblue and United Airlines (August 17, 2015)
I want to look at the airlines today. If you look at the Amex Airline Index ( XAL–X ), I always like to look for touch and goes, which is my pattern where a stock comes down and then bounces along the runway, moves back up, those are nice patterns. Here we’ve kind of got the touch but we’re waiting for the go. This is still trending lower. Thank the good Lord that this isn’t a tradable instrument because I’d probably be short.
Instead we look at the individual names and they show kind of a different story here. You look at JetBlue ( NASDAQ:JBLU ). Right now this is my favorite airline for the pure and simple reason that it’s up to a new high and it’s popping out of a volatility squeeze. This is one that several members in the “Stock Market Mentor” forum and “Option Market Mentor” too, for that matter, have been all over. So I want you to look at JetBlue ( NASDAQ:JBLU ), and I want you to look at it in this timeframe, because this is really the one that matters.
If you look at it in the daily timeframe it’s up 40 cents. Big whoop! So it will be down 42 cents tomorrow and you’re going to get shaken out. Right? Don’t do that. Instead you just take your entry, zoom out to a weekly chart, and just let her rip. This is not Jimmy Shaker Day, this isn’t the top of the stock here for JetBlue ( NASDAQ:JBLU ).
Now look at some others, different configuration here. Look at Spirit Airlines ( NASDAQ:SAVE ), this is a timeframe that doesn’t kind of work for me. I would instead want to look at this timeframe, see this as a base building, and frankly this needs to be moving sideways long enough for the stock to consistently be trading above the 50-day moving average. So this is one that I think you’ve got to wait on. Maybe we’ll get a little bit of a lift but remember that airlines index is still drifting lower looking like maybe it’s wanting to put in a base, but here this is actually more of a stock specific deal than a sector specific thing.
So you look at JetBlue ( NASDAQ:JBLU ), that works. Spirit Airlines ( NASDAQ:SAVE ), not quite so much. But then you look at United Airlines ( NYSE:UAL ) and this is kind of right in the middle of what’s working and what’s not working yet. This still drifting below the 200-day moving average but you can see it’s being bought on any kind of pullback. So I would say this is really okay to buy too, if you are looking for airline exposure. I’ve made this mistake more times than I’m going to tell you because then you wouldn’t respect me, but this always works for me. Just buy the leader.
It’s not like everybody’s forgotten about the other airlines or, “Oh everybody’s missed such and such a stock and I’m the only one that’s found it and once everybody else finds it I’m going to make a gang of money.” It doesn’t work that way. JetBlue ( NASDAQ:JBLU ) is up at a high for a reason. The reason is because it’s under buying pressure. If you wait until you’re the last one in the door that’s not going to work out too well for you.
So I would suggest you look at this, and again, if you’re interested in airline stocks there’s plenty of other sectors to be trading and I’m trading a bunch of them but if you’re looking a airlines I think JetBlue ( NASDAQ:JBLU ), that’s your ride. I won’t say it’s first class but you do get a little extra legroom.
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