Another amazing day for American Airlines Group (AAL) thanks to Mr. Trumps support for the airline industry and stimulus package. AAL operates American Airlines and U.S. Airways. The company has nearly 1,000 aircraft and serves destinations in more than 50 countries. It is also one of the world’s largest cargo transporters.
AAL, along with the entire airline sector, has been crushed in recent weeks. Last week, the stock fell to an all-time low. Volume during the decline was extremely high, a sign of capitulation. The rebound in recent days off the intraday lows has occurred on very heavy trading volume, a bullish sign.
Because of the very steep slope, there is little overhead supply above current prices. The first piece of potential resistance is the 21-day exponential moving average near the $21 area. This is an extremely high-risk/high-reward technical play. Chart support from the recent trading low is at $14.50 and we would put a stop-loss just below there. We would take profits in the $21 zone.