Are the Airline Stocks Preparing for Takeoff?
This morning, the leading airline stocks are trading slightly higher at the start of trading session. The airline stocks have showed good relative strength since December 2012 when this sector broke out on the charts. At this time, the airline stocks look to be range bound. Should this industry group begin to consolidate further on the daily charts they could be building a base to trade higher. Traders that want to track the entire sector can follow the Guggenheim Airline ETF (NYSEARCA:FAA). Currently, the FAA is trading into a double top on the weekly charts, so without consolidation on the charts the airline stocks will likely be range bound in the near term.
One of the leading airline stocks that traders should follow the United Continental Holdings, Inc. (NYSE:UAL). Short term day traders should watch for intra-day resistance around the $33.13, and $33.87 levels. Swing traders can watch for daily chart resistance level around the $35.00 level. Some leading airline stocks that could trade similar to UAL include Delta Air Lines Inc. (NYSE:DAL), US Airways Group, Inc. (NYSE:LCC), Southwest Airlines Co. (NYSE:LUV), and JetBlue Airways Corporation (JBLU).
Traders and investors should remember that the airline stocks are highly sensitive to the price of oil. Outside of labor costs oil is the next major expense for the airlines. Recent consolidation in the industry has certainly helped the airline stocks to have pricing power over consumers. Remember, until the Guggenheim Airline ETF (NYSEARCA:FAA) can consolidate on the charts for several weeks the airline stocks will not likely be taking off anytime soon.