The airline sector is offering numerous technical trading signals, reports Suri Duddella.
In 2018, the U.S. tax overhaul bill boosted the profits for many industries, including Airlines.
Travel Industry and Airlines are supposed to be some of the biggest winners from Tax reform. Airlines pay full statutory tax rates and have very high Capital Expenditure requirements. The higher demand for air-travel, increased capacity, stable market competition, a tax cut windfall and the projected uptrend of Revenue per Available Seat Mile (RASM) metric may help airlines to generate increased revenues and profits.
A restructure plan and consolidation starting in the early 2000s, has consolidated the U.S. marketplace to four major airlines: Delta Airlines (DAL), American Airlines (AAL), United Airlines (UAL) and Southwest Airlines (LUV).
With potential news of recession and rising oil prices, the airline industry has been under pressure in 2019. Even with all the challenges airline investing entails, some investors believe airlines offer excellent returns in bullish markets.
Here are few U.S. airline stocks and airline ETFs for investors to look into.
Airlines
- Alaska Air Group Inc. (ALK)
- United Continental Holdings Inc. (UAL)
- Delta Air Lines Inc. (DAL)
- Southwest Airlines Co. (LUV)
- Spirit Airlines Inc. (SAVE)
- American Airlines Group Inc. (AAL)
- SkyWest Inc. (SKYW)
- JetBlue Airways Corporation (JBLU)
- Hawaiian Holdings Inc. (HA)
ETFs
- SPDR S&P Transportation ETF (XTN)
- iShares Transportation Average ETF (IYT)
- U.S. Global Jets ETF (JETS)
- The ARCA Airline Index ($XAL)
Airlines Stocks Chart Patterns
United Airlines: In 2019, UAL has been trading in a consolidated rectangle channel pattern between $77 to $90. A breakout above $90 would expand its current channel to the next target range: $96-102 (see chart).
Alaska Air ABC Bullish Pattern
Alaska Air is trading in an ABC Bullish pattern. Entry is above $59. First target zone is at $64-67 and second target zone: $73-$77.
Rectangle Channel Pattern
In 2019, JETS has been trading in a rectangle channel pattern. A close above $31.58 would signal a breakout. Upper target zone: $31.58 to $35.18.
ABC Bullish Pattern
Delta is trading in an ABC Bullish Pattern with a long entry above $57 and a stop below $55. Targets are set $63-65, $67.
Find more of Suri’s work at surinotes.com.
