I SPENT 24 HOURS ANALYZING AIRLINE STOCKS | Prediction
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What: Airlines stocks are about to be very volatile and in this video we are going to explain why.
How: I have spent one full day dedicating myself fully to research airline stocks and determining if its a good time to buy and this is what I found. Why: You must be wondering why now? Why would we discuss something that is clearly operating at a loss and has such a hard time to adjusting to the new normal? Is Technical analysis telling us to buy? Will the price of the airline stocks go up or down in the near future?
Well in this video we are going to answer all of those questions.
Lets go ahead and start with the quick financial breakdown of 4 Largest Airline companies in US:
Rank Airline Fleet size Price change:
1 American Airlines 1,569 YTD 57% lower net loss of $2.1 billion in the second quarte
2 United Airlines 1,380 YTD 59% lower lost $1.63 billion in the second quarter as revenue plunged 87%
3 Delta Air Lines 1,349 YTD 52% lower $5.7 billion net loss in the second quarter
4 Southwest Airlines 754 YTD 32% lower Southwest Airlines reported its first quarterly operating loss since the depths of the Great Recession 11 years ago $915 million
Airline companies got over 50 billion dollars in financial aid since beginning of the year, but it came with strings attached like: Airline companies can’t lay off their workers, make pay cuts or do unjustified stock buybacks until at least 30 September. If Airline companies would have to pay half of their aid in full with equity, US government would have the largest position in US airlines of around 40%. Same thing that happened with General Motors in 2008. US Tried to bail out GM with 50 billion of financial aid and in 2 years they filed for bankruptcy. Erased their debt to us government and issued new stock the following year. If Airline industry will follow the same path, we know what to prepare ourselves for.
I am continuing to monitor Airline companies and their price targets because next few weeks can be crucial. With the current set-up my indicators are screaming “buy” but the markets are not rational - personally I will be only if the companies will break out of this current trend and confirm resistance as a support.
Even though we are going Through and through with the airline companies stay with me till the end of this video because we have something very important to point out about the second Biggest aerospace’s company. That’s right, Airbus displaces Boeing as aerospace’s biggest company.
Shares of Boeing are trading almost 55% Lower if comparing to the price at the beginning of the year. The main cause of that are news like this one: Boeing Uncovers Fourth Production Flaw Affecting About 700 Dreamliners. Even though the company’s stock did not get hit as much as it would have in the past, but these are not good news, this just means that everyone is used to negative news and they have a lot more room for improvement.
We have So many different companies doing the same thing at the same time… Dumping all of the bad news at the time of crisis in hopes for stronger recovery in the future. Same thing that happened in 2008 during Global Financial Crisis. Just look at some of the Major Bank Stocks like JP Morgan Chase who’s shares are up over 400% since 2008, or The Goldman Sachs Group who is up 200% or even Bank of America Corporation (BAC) who’s stock never fully recovered but still up Almost 400% since November of 2008. If you know a company that is dumping all of the negative information at the same time take a second to let me know what this company is, I am very curios what you can think of.
There is a reason why I am bringing this up to your attention. Always do your due-diligence on what you are investing but just like we pointed uptimes during the technical analysis - Markets are not rational. In order to be a successful investor you have to make sure to diversify into something that brings people value. One smart way to profit on this is to wait for catalyst news to pop out that will drive the price higher on the stort run and for the long term hold, wait for the stock to find support at the next major resistance.
If you found this video helpful, don’t hesitate to support this channel by subscribing, liking commenting and I will see you in the next one.
#airline stock #investing #trading