Trading the Transports: Of Planes and Pullbacks
The big rumor in the tranportation sector was a potential acquisition of AMR Corporation, parent company of American Airlines, by either Delta Airlines (NYSE: DAL) or US Airways (NYSE: LCC). But short-term traders interested in a far less intense engagement with the airlines industry may prefer to focus on a pair of airlines stocks that have moved to “potential acquisition” levels in the short-term.
Shares of Alaska Air Group (NYSE: ALK) have closed lower for three days in a row heading into trading on Friday, and are now trading in technically oversold territory. The stock’s pullback comes as traders and investors take profits in the wake of ALK’s climb to new, 52-week highs in the second half of December.
ALK has a neutral rating of 6 out of 10, and a modest, short-term positive edge of just over half a percent. That said, the stock is already at its most oversold since advancing back into bull market territory in late November.
Down two sessions in a row as of Thursday’s close, but not yet significantly oversold are shares of Jetblue Airways Corp (NASDAQ: JBLU). JBLU is only recently trading back above its 200-day moving average as of mid-December, and has yet to experience a strong pullback.
Shares of JBLU began Thursday’s trading with a “consider avoiding” rating of 3 out of 10. But a second day of selling has helped swing the stock’s short-term edge entirely in the other direction. The three-point ratings shift leaves the stock with a “neutral” 6 out of 10 rating ahead of the final trading day of the week.
And although this stock is only one day into any potential pullback, Ryanair Holdings PLC ADRS (NASDAQ: RYAAY) finished lower by well over 1% on Thursday, selling off after a rally that began with the stock gapping higher on the open by more than four percent at the beginning of the week. With neutral ratings of 4 out of 10 heading into Friday’s session, the stock will need to continue to lower, possibly revisiting the oversold lows of late December, before attracting buyers aggressive enough to send Ryanair Holdings soaring once again.
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David Penn is Editor in Chief of TradingMarkets.com