Yesterday, we looked at a 10-Month SMA Chart of Advanced Auto Parts Inc. and noted that it was showing a ‘sell’ signal after its monthly price is trading below the 10-Month SMA.
Today’s Chart of the Day is a 10-Month Simple Moving Average Chart for American Airlines Group Inc. (NYSE: AAL).
American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo. As of December 31, 2019, the company operated a mainline fleet of 942 aircraft. It serves 365 destinations in approximately 61 countries, principally from its hubs and gateways.
Now, below is a 10-Month Simple Moving Average Chart for American Airlines Group Inc.
Back in April 2018, the AAL 1-Month Price crossed below the 10-Month simple moving-average (SMA) indicating AAL is on a PowerTrend ‘Sell’ signal (circled).
Prices fell steadily and then…
You can see where prices plummeted recently, since the very function planes exist to serve has been suspended by the CDC’s advice about containing the coronavirus. (This is a good example of fundamental analysis being confirmed by technical analysis.)
Since the PowerTrend ‘sell’ signal occurred for the stock back in April 2018, when the stock was around $43.40, AAL shares have gone on to see a drop of 63.3%.
Now, as you can see, the 1-Month moving-average is still below the 10-Month SMA. That means the bearish trend is still in play!
This bearish price trend makes AAL a good candidate for a put option purchase.
As long as the 1-Month Price remains below the 10-Month SMA, the stock is more likely to keep trading at new lows in the coming days and weeks.
We’ll be keeping our eye on this stock as it continues to trend downward so we’ll know the moment the market conditions shift and the stock offers a prime buying opportunity in a bearish market.
Editor, Chart Of The Day
|Action||Ticker Symbol||Name||Action Description|
|Buy to open||ALXN200417P00100000||Alexion Pharmaceuticals, Inc. (NYSE: ALXN) April 17, 2020, $100 put options||Buy to open ALXN April 17, 2020, $100 put options at $21.10.|
|Buy to open||MRTX200417P00090000||Mirati Therapeutics, Inc. (NYSE: MRTX) April 17, 2020, $160 put options||Buy to open MMM April 17, 2020, $160 put options at $29.18 per contract.|
|Sell to open||MRTX200417P00080000||3M Co. (NYSE: MMM) April 17, 2020, $145 put options||Sell to open MMM April 17, 2020, $145 put options at $18.08 per contract.|