Thursday, February 11, 2016
Full-time stock trader. Follow me here and on 12631
Joined Apr 1, 2010
8,862 Blog Posts

Bulls on a Plane

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Consistent with what I said earlier in my video market recap, as well as in this post about the confectioners, we need to be prepared in the event that capital simply rotates within equities, as opposed to leaving risk assets entirely. Given the latest bout of heavy selling the energy/material complex, it makes sense to look for sectors that are set up well, where commodity input costs are always important.

Precisely one month ago, I wrote this post indicating that I expected airlines to outperform the energy sector in the coming months. We know that the airlines tend to be especially sensitive to energy prices, but that works in both directions. Regardless of micro and macroeconomic views about the relationship between airlines and fuel costs, though, the price action and volume patterns in the following airline stocks command our attention, going forward.

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One comment

  1. I like this post and agree with continued strength in these names because of a pullback in energy but more importantly for me just the price action.

    I’ve been constructing a trade in GOL for a while now and while it has not pulled away as many of these have I think its time is coming.

    That said I looked at a few of these today and Im not convinced of these bull flags near term.

    Im watching for alternation to this pattern and possibly lower intermediate prices.

    Just a hunch, and opinions mean little, I think an oil spike is due to mix things up a bit… but when.