Airlines Uncertainty Continues To Weigh On Stocks

Airline stocks are moving into the fall months with a lot to prove, from a time and price perspective (looking at the charts) as well as a business perspective (as pandemic news continues).

Today’s charts look cover the Amex Airline Index (XAL), along with a couple of stocks.

Warning, the charts aren’t pretty!

Note that the following MarketSmith charts are built with Investors Business Daily’s product suite.

I am an Investors Business Daily (IBD) partner and promote the use of their products. The entire platform offers a good mix of analysts, education, and technical and fundamental data.

$XAL American Airlines Index “daily” Chart

The “daily” chart offers a close-up view of the price action. It’s clear we have been in a down-trend, but airlines made a low in August and are attempting to bounce.

One small problem. After that bounce and consolidation came a breakdown on Wednesday. And unless the Airlines Index can reverse higher quickly, it appears set to retest its August low.

amex airlines index consolidation investing analysis chart september 8

$XAL American Airlines Index “weekly” Chart

The “weekly” chart takes a step back and clearly illustrates the current downtrend. That said, momentum is attempting to turn higher so there’s still an opportunity for this pullback to hold. Breaking over the falling 10-week moving average will be key.

american airlines stock index weekly chart september 7

$UAL United Airlines “weekly” Chart

Many of the airlines stock charts are the same. United Airlines (UAL) is just one example of many that look the similar. Here again, we see UAL testing it’s falling 10-week moving average with a similar look to the index.

ual united airlines stock price weekly chart investing analysis september 7

$EXPE Expedia “weekly” Chart

Another travel related stock, Expedia (EXPE), shows a stronger recovery in price. That said, it also shows the downtrend that has hit travel stocks over the past several weeks. EXPE has a lot of work to do (base building) before it can break out of this pattern.

expedia stock price analysis expe bearish trading chart september 7

Twitter: @andrewnyquist

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

Editor’s note: On September 9, 2021 at 9:01 CST there was a correction to grammar in the title from “Weight” to “Weigh”.

Sign up for our FREE newsletter
and receive our best trading ideas and research