Jon Lewis

Airline Stocks Grounded by the 200-Day

    Tweet This

Free Trading Guides

If you haven't been near a TV or been online, the airlines have been in the headlines today.

First came news that Southwest Airlines (LUV) apparently used unapproved parts for repairs on some of its jets. Then U.S. Airways (LCC) announced that it's raising its checked bag fees. Ironically, not charging baggage fees has been one of Southwest's major selling points.

I dug into the sector a bit and was surprised to find that the charts for a few of the sector's major players are being impacted by their 200-day moving averages.

Believe it or not, the sector itself has been one of the strongest performers of the past couple of months. The Claymore Airline Index ETF (FAA) is up more than 40% off its June bottom, and has outperformed the broader market during that period.

But back to the 200-day. Let's look at a few charts that showing how the 200-day is throwing some turbulence at some of the key airline stocks.

Delta Air Lines (DAL) could be breaking out of the shackles of its 200-day, a trendline that has beaten the shares back three times in the past four months.