Monday Stock Movers: 3 Airlines Stocks to Avoid
Stocks were off to a strong start on Monday morning.
For many experienced traders and investors, a warning against investing in airlines stocks is a lot like a warning against playing in rush hour traffic.
That hasn’t stopped many traders from trading these stocks — and often with some success. However, as with all stocks, there are better times to trade these stocks and “worse” times to trade these stocks, and our Short Term PowerRatings are a helpful guide for swing traders to separate “consider avoiding” moments from “consider buying” ones.
Jetblue Airways Corporation
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JBLU |
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PowerRating) Short Term PowerRating 2. RSI(2): 92.15
Airlines stocks are prominent in our list of stocks that have trading below the 200-day moving average and have gained 10% or more over the past five days. In fact, I’ve started to suspect that these stocks have a sort of “canary in a coalmine” character vis-Ã -vis the rest of the stock market.
US Airways Group Inc.
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LCC |
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PowerRating) Short Term PowerRating 3. RSI(2): 93.47
By that, I mean when the list of stocks that are overbought and trading below the 200-day moving average begins to grow, the airlines industry tends to be disproportionately represented. This is a purely an anecdotal observation, to be sure, but for traders who want to be particularly aware of overbought markets that may be increasingly vulnerable to correction, the appearance of a large number of overbought airlines stocks — such as those in today’s report — may be a sign worth watching for.
Republic Airways Holdings
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RJET |
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PowerRating) Short Term PowerRating 3. RSI(2): 90.63
As stocks that are trading below their 200-day moving averages and have been up by 10% or more over the past five days, all three stocks shown here belong to that class of stock that has produced negative returns one-week later in our historic testing. Traders should keep an eye on these stocks in the event that they continue to move higher and become all the more vulnerable to potential reversal.
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David Penn is Editor in Chief at TradingMarkets.com.