The benchmark index for airline stocks reached a three-month high Thursday after the price of oil dropped to below $100 a barrel for the first time since March. The Arca Airline Index (XAL) jumped as much as 4% to an intraday high of 44.68 points. Of its 13 components, all but three traded higher. Shares of US Airways Group Inc (LCC), Delta Air Lines (DAL) and AMR Corp (AMR) were up about 8%. This is definitely a positive sign going forward. In fact, a closer look at the daily chart of LCC suggested that the stock could climb above 12 and test the 6-month high after the downward trend halted. Just so that you know, initially profiled in our October 9, 2009 “U.S. Market ETF Trading Map” LCC had gained about 125% and remained well position.
The graphic below is from our “U.S. Market ETF Trading Map”, which shows the near-term technical bias for LCC. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red. The yellow bars identify period of neutral or sideways trading pattern. Additionally, the light-blue shading represents the short-term trading range. A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading). Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.
Chart 1.1 – US Airways Group Inc (daily)
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