It might be time to fade airline stocks.
Although US travel exceeded 2019 levels Over the July 4th holiday weekend, based on TSA screenings, the group’s tech facility will flash warning signs, Piper Sandler’s Craig Johnson told CNBC “Trading nation” on Friday.
A diagram of the US Global Jets ETF (JETS) shows the basket of airline stocks is falling below an upward support line and its 50-day moving average, both worrying signs for Johnson, his company’s senior technical research analyst.
The fact that 2021 saw the most recalcitrant passenger incidents in 25 years and is only halfway through doesn’t bode well for airlines either, Johnson said.
“In my view, easy money has been made with this recovery trade,” he said. “I think now is the time to get some money out of JETS.”
The only airline stock that may have fuel left in the tank is Southwest Airlinessaid Boris Schlossberg, Managing Director FX Strategy at BK Asset Management, in the same “Trading Nation” interview.
“They are the low-cost market leader in the industry. They have the best record and in the long term I think they create a very, very strong brand,” said Schlossberg. “Yes, they are struggling with cancellations. Yes, they are delayed. But they stand up and try to fulfill their capacities, unlike” delta and United. “
Delta and United Airlines did not immediately respond to CNBC’s request for comment.
Schlossberg expected Southwest to take market share from its competitors as consumer traffic recovers as it relies more on it than on business travel.
“For me, this is the only trade in JETS that I would be long on and stay for the next 18-24 months,” he said.
Southwest stock finished less than half a 1% decline at $ 53.66 on Friday. JETS finished trading in half, up 1% at $ 24.50.