Southwest Airlines (LUV) is trading lower on Wednesday morning after the company updated its guidance on Q1 RASM, or “Revenue per Available Seat Mile”.
The company now forecasts Q1 2018 RASM to be in line with Q1 2017, compared to its previous forecast of 1-2% higher.
They cited lower than expected demand and a competitive fare environment as reasons for the guidance update. However, they also noted a positive trend for CASM, or “Cost Per Available Seat Mile,” which should come in lower than previously expected.
Looking at the chart below, today’s move lower takes place early in the current intermediate cycle.
A break below the last cycle low, near $54, would indicate a negative outlook for the remainder of the cycle. If the break happens in the near future, this may also prove to be a negative omen for transport indexes.
The intermediate cycles are represented by the black semi-circles at the bottom of the chart.
Southwest Airlines (LUV) Stock Chart with Weekly Bars
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