I was going to say in for a crash, but that would not be a good word to use when it comes to an airliner. Airlines have had a fairly good day today with many of the individual names making a new 52 week high today. But, before you go chasing the airlines you might want to wait for them to make a landing before jumping on board. That is if you like airline stocks in the first place.
As Jeff Macke used to say “Is the market open? Then it is a good day to sell airlines”. In the context of where the charts are right now, I agree Jeff.
Recently I have focused on the Dow Transportation Index being squeezed right up into a strong resistance region, that condition is still intact after today. A close examination of the airline index ($XAL) reveals strong resistance as well at this point.
For me, I would be a seller of airlines. Your reward miles may vary.
I’ll just let the following three charts tell the rest of the story.
(click images for full view)
Dow Transportation Index
Airline Index ($XAL)
United Airlines (UAUA)
(full disclosure: no current position in any airline stock or the XAL index)
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