Each week at ChartSmarter we like to bring to a little insight into what we do on a daily basis. We have been at it for more than 4 years and we love doing it. Each night we detail 8 to 10 of our favorite ideas, both long and short, for the next days session. We do NOT have a chat room, nor are we active “tweeters”. We like our business growing by word of mouth. For those who would like to see a full copy of our Monday Game Plan, email me at firstname.lastname@example.org.
In Mondays Game Plan we looked at AAL. The airlines look as they are softening and it may be an indication of a bottoming process going on in crude. Names like DAL HA RYAAY have recently fell below their key 50 day SMAs. AAL did the same and we suggested a short just below the round 50 handle as it undercut its 50 day SMA in very active volume. On Wednesday it traveled to the 49.75 trigger and the trade is UP by more than 3%.
AAL is an airline play whose group has been getting cozy with the cheap price of crude and perhaps that is coming to an end. The stock is still up 4% YTD and by 45% over the last one year period and sports a dividend yield of .8%. The stock reported on Tuesday and it was not well received down by 5%. It is now down 3 of the last 4 weeks with the one up week ending 1/23 up by 11.8%. AAL shot straight up and from the intraday lows of 10/13 to the highs of this week the stock doubled. When a stock rallies that briskly it is normally time for a prudent pullback. The stock sliced its 50 day SMA in big trade which aligns with the round 50 handle and lets look to short a move back into that line at 49.75.