Airlines stocks have done a good job shrugging off fears of the new Covid-19 variant, even as omicron has triggered a surge in positive cases.
However, the market has either become insensitive to the news or investors are reacting to the fact that while case numbers are rising, hospitalization rates are not.
In fact, it’s probably a bit of both.
In any case, airline stocks ignore the new look well.
That’s even with thousands of flights canceled over the past few weeks due to a shortage of workers.
For what it’s worth, cruise stocks are also doing an excellent job of brushing off the Covid-related news.
Are airline stocks finally ready to fly?
Delta Airlines Shares Trading
Despite an increase in omicron cases last week, note how Delta Air Lines is doing (From) – Get a Delta Air Lines, Inc. report. It wasn’t bad, just mixed. Last week, the stock rose for two days and fell three days, closing down a measly 56 basis points.
No panic despite the negative headlines – especially for airline stocks.
Looking at Delta, the stock is currently hovering above the $39.89 level. Not only was that a double-top resistance level, it was also the highest in December.
So immediately after trading begins on the first trading day in January, we have a monthly delta rotation in the face of bad news. I love this kind of work. The key here is sustainable elevation.
Simply put, we need to see Delta stock hold around $40.
If it can do that, the 200-day and 50-week moving averages are in play, along with the downtrend resistance (blue line). Above that, the $45-$46 area is the next bullish target.
On the downside, watch the 10 day and 50 day moving averages on the downside if delta loses $39.89.
Southwest Airlines trade
Hard to believe that Southwest Airlines (love) – Get the Southwest Airlines report It hit new highs after the March 2020 sell-off. Could it do it again?
Let’s aim for a lower level, for now.
Stocks started breaking out of the falling wedge (blue lines) and recently retraced the 10-day and 21-day moving averages, along with the weekly VWAP metric.
The stock has risen in seven of the past nine sessions and is continuing to shoot for 50 days. This is the first goal. The December high is the second target on the upside, up near $47.
If Southwest stock manages to break that level as well, it will run at $50, followed by the 200-day and 50-week moving averages.
On the downside, I don’t want to see the stock lose its 10-day and 21-day moving averages or the weekly VWAP metric.
United Airlines Trading
Last but not least, we have United Airlines (UAL) – Get a United Airlines Holdings, Inc. report.. The stock looked good this morning, rising above the key level at $45.58 and the 50-day moving average.
However, the stock has lost some momentum since then and fell below both levels. If you can clear these signs again, watch for $46.60 – the highest level in the last month.
Above the two markets could open the door to $50, along with the 50-week and 200-day moving averages. This would be a great trading opportunity for the bulls, but they need to see the stock liquidate the key $45.60 level.
On the downside, a break below the 21-day moving average could restart the $39 to $40 area.