Don't Ignore This Chart!

Airlines Continue Bouncing Off Key Support

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

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 of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More