The transportation group has been a bit soft with rails KSU and CP slumping Friday. But there were previous names acting perhaps as “canaries in the coal mine” like GBX or TRN, which are now lower by 33 and 48% respectively, not from their most recent 52 week highs but their all time highs. One group within has remained strong and that has been the airline group. Sure the “swift descent” of crude, pun intended, contributed to their strength, but as technicians we examine price action only. Below is how RYAAY was examined in our Monday 1/12 Game Plan.
Stocks that can be bought as they test their 50 day SMAs are RYAAY ICLR. RYAAY is an Irish airline play that is down 7% YTD but higher by 38% over the last one year period. The stock traded with the round numbers of 50-60 in 2014 between April and its last earnings report on 11/3 which saw the stock “fly” 6.1% on 11/3/14. The next session it rallied another 6.6% demonstrating good follow through. Those were the first CLOSES above the 60 handle since the 2 days of 4/2-3/14. RYAAY closed higher after prior reports on 7/28 and 5/19 which rose 2.8 and 7.3%. It now has dropped 8% from all time highs last week and is approaching 50 day SMA support which would roughly align with a gap fill from 12/3’s 7.2% advance. Lets look to enter at its 50 day SMA at 65.