Don't Ignore This Chart!

Airlines Continue Bouncing Off Key Support

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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

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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