Hope everyone had a wonderful weekend. Last week, The Oxen Report had a veery successful week, making four successful selections and no losers. Check out my recap of last week here. This week, the market faces a low amount of economic data and market moving earnings reports. Attention most likely will turn to overseas news, Europe’s recovery, the oil spill, and other developing stories. This morning the markets are little changed on the futures, but world markets are down on fears of Hungary becoming the next Greece and a reaction to Friday’s USA drop on jobs data. Lets look for some safe plays on this concerning day.
Buy Pick of the Day: Southwest Airlines Co. (LUV)
Analysis: This morning American airline companies got some stellar news from the IATA that for 2010 the organization is predicting that airline companies will be making a profit. While business is weak in Europe, the USA has strengthened its market enough to where the IATA predicts that close to $2 billion profits will be made in the economy here. Airlines have been doing fairly well over the past couple weeks despite the market’s turmoil. One company, however, that continues to be undervalued is Southwest Airlines Co. (LUV). With futures barely in the green, the Asian markets dropping over 3%, and new fears coming out that Hungary cannot cover its debt, the airlines may be one of the only outlets for safety.
Southwest Airlines over the past three weeks has dropped over 8%, but it appears ready to make a move back to the upside today with the release of the IATA news as well as some news from Friday that appears yet to have been priced into the stock. Friday was a simply awful day for stocks, and Southwest Airlines noted that they had seen a 3.5% increase year-over-year of traffic in May. The company got no boost or gain from the news whatsoever. A combination of the IATA news with the traffic news should help to pull up this undervalued company.
Futures are continuing to rise this morning, and there appears to be more good news on the financial front than bad news. BP has said its efforts are starting to become successful at capping oil. A stronger market would definitely help to bolster Southwest’s move further.
Technically, LUV is ready to bounce on this news. The company is undervalued on RSI, oversold on fast stochastics, and near…
