The airline stocks have rallied sharply higher since late August with the rest of the major stock indexes. This sector is now higher by more than 14.0 percent since the August 27th pivot low.
Delta Airlines Inc.(NYSE:DAL) is one of the leading stocks in this sector. This stock is still trading below it’s daily chart 200 moving average which is still a bearish sign. However, the recent move higher in the stock has been very good. The stock is now getting extended on the daily chart and nearing important resistance levels in the $12.00 – $12.50 area. At this point profit taking is likely to occur in the stock and a pullback should take place shortly.
Jetblue Airways Corp.(NASDAQ:JBLU) still remains in the middle of a trading range. The low of this range is around the $5.40 area. The high end of the range for Jetblue Airways is around the $6.40 level. Until the stock can trade and close above the daily 50 moving average the low end of the range is likely to get tested before the high range.
U.S. Airways Group Inc.(NYSE:LCC) is another leading airline that has traded sideways since making a high in late July. This stock looks very similar to Jetblue Airways as it is also range bound. The high end of the range is around $10.40 and the low end is around $8.20. It is important to note that this stock has been considered a takeover candidate and that is probably why it is even trading as high as it currently is.
At this time the airline sector could see a little more upside. However, stocks such as Delta Airlines Inc. are getting extended and the others are stuck in a range. Therefore, look for a pullback or consolidation to take place in this industry group very soon.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
