Wednesday, 4 May 2016

BA, DAL, UAL - airlines diving

Whilst the main market closed broadly lower, there was notable weakness in the airlines. Boeing (BA), Delta (DAL) and United (UAL) settled lower by a rather significant -1.2%, -3.5%, and -3.3% respectively. Near/mid term outlook is bearish, although if oil/fuel prices remain at/below current levels, that will help keep operating costs under control.

BA, daily

DAL, daily

UAL, daily


Suffice to add, BA has seen a clear break of the rising trend that stretches back to February.

DAL continues to struggle, having fallen almost 20% since mid April. Next support is the 40/39 zone.

UAL is seeing rather severe weakness, having been unable to clear powerful resistance in the $61s. Next support is the 44/42 zone.

If the broader market implodes to the sp'1600/1500s this summer/autumn, then the airlines will be dragged lower, even though low energy/fuel prices will help them to a significant extent.