Some Food For Thought....
In case anyone is interested, LUV is showing a reversal trend pattern in it's chart. The pattern indicates a bullish move. Although you can find over a hundred charts with bullish patterns today, I think most of them will prove to be false signals, the result of short covering and some momentum investing.
I think LUV's chart is saying something different and it does depend on how one analyzes these charts. If the price of fuel is going to come down in the near term, then LUV would definitely have to be the beneficiary of those lower costs, looking at it from a fundamental point of view.
I'm of the opinion that higher fuel costs have been a major factor in the demise of LUV's recent performance. I have not done any fundamental analysis of LUV, I'm only sharing what I think the indicators are telling me.
The Relative Strength Indictor (RSI) at 47.5 certainly has room to run. A break of 50 with volume would confirm a trend reversal, in my opinion.
The Chaikin Money Flow Indicator (CMF) shows that money has finally stopped flowing out of LUV.
The Williams%R Indicator indicates the first move up from an oversold position. (below -80 equals oversold, above -20 equals overbought)
The Slow Stochastics have just flashed a buy signal with the %D line turning up and crossing the %K line, from an oversold position.
stockcharts.com[l,a]declyymy[pb50!b200!d20,2][vc60][iLb14!Lk14!Ll14!Lc20!Lh14,3]
I don't have a position in LUV, but I intend to look at it further. For those wishing to confirm the trend reversal, a higher open tomorrow could be considered confirmation, but it may be prudent to see if it closes higher tomorrow. If it closes higher, the odds are this stock has turned the corner.
dabum |
