Don't Ignore This Chart

Airlines Continue Bouncing Off Key Support


The Dow Jones U.S. Airlines Index ($DJUSAR) made a very significant breakout late in 2014 and after its peak in January 2015, the group has been doing everything possible to hold onto price support ever since.  Despite a revenue and earnings miss by Delta Airlines (DAL) on Tuesday, January 19th and revenue misses from a trio of airlines on Thursday, January 21st - Alaska Air (ALK), United Continental (UAL) and Southwest (LUV), the DJUSAR has managed to close above the 200-205 support level.  Check out the chart:

In addition to price support, there's a relative uptrend line vs. the S&P 500 that is at support.  A break of this trend line confirmed by a price support breakdown beneath 200 would be enough technical evidence to avoid airline stocks, in my opinion.  A rally and renewed relative strength needs to begin from current levels.

Happy trading!


Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015. Learn More
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