It has been a busy week for airlines.
Delta posted third-quarter earnings Wednesday morning on higher demand than a year earlier.
Meanwhile, Southwest Airlines dominated the headlines earlier in the week after a wave of flight cancellations – the company canceled more than 2,200 flights from Saturday to Monday, blaming weather and air traffic problems.
The JETS ETF remained largely unchanged for the week, but remains 17% below its peak in March.
Now Miller Tabak’s chief market strategist, Matt Mailey, is keeping a close eye on the charts as he awaits the next step in the group.
In an email to CNBC, he said that the “front lines” are well drawn in the XAL airline index. It highlights the break above the neckline of the inverted head and shoulders pattern – a bullish technical setup that suggests a reversal of the downtrend.
Investors should now watch the $ 101.50 level, the highs it touched in September and October but failed to break, he said.
If ‘they can bounce back hard and break above that $ 101.50 level, that would give them a nice higher high to watch for … a breakout of the upper neckline of this inverted head and shoulders pattern and it will all be very, very optimistic, ”he further said in an interview with CNBC’s Trading Nation on Tuesday. “If it goes over this value, it will be very positive for the group.”
The index closed on Tuesday at $ 95.62. To reach Meili’s goal, you need to raise 6%.
Gina Sanchez, CEO of Chantico Global and chief market strategist for Lido Advisors, said the next few months could be critical for airlines.
“Vacation travel is now an important litmus test,” Sanchez said in the same interview. “The pandemic has actually been associated with a lot of car travel, car travel, car travel, but we haven’t seen a really serious return to air travel yet.”
Number of travelers passing through TSA Checkpoints since the beginning of August this year has averaged 1.79 million. Over the same period in 2019, the average was 2.3 million.
Signs that delta Covid cases are declining, and the likelihood of vaccinating children between the ages of 5 and 11 should encourage them to return to the skies this holiday season, Sanchez said.
“All of the ones that are really made to travel on vacation are around Christmas time, so we have to see how that actually works and this will be a defining moment for airline stocks,” she said.
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