Airlines Stocks Have Been Flying Higher, What Is Next?
The airline stocks have been soaring higher recently. This sector has been very depressed for years due to high fuel costs, labor costs, and increased competition. Now that was the past and here is the present. Over the past couple of years the major airlines have all consolidated creating three major airlines.
Today, U.S. Airways Group Inc (NYSE:LCC) completed its merger with American Airlines finalizing the mergers of the mega carriers. Recently, United Airlines merged with Continental Airlines to form United Continental Holdings Inc (NYSE:UAL). In 2011, Delta Air Lines Inc (NYSE:DAL) merged with Northwest Airlines. Investors can now view the airlines slightly different since there is much less competition in the industry. The only negative for the airline stocks now will be the high energy and labor costs.
Please understand, this sector is very overbought in the near term. So this tells us that traders should watch for consolidation on the daily charts before looking to buy the airline stocks.