![]() ![]() On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. Once it gets a better top line, it can then tackle the new debt it acquired. Luckily the company has managed to be cash positive from operations. That is a lot of hemorrhaging for management to wade through. The loss of revenues is translating directly down into a $2 billion yearly loss. Meanwhile, it serves no purpose to examine the fundamental metrics because they are still suffering from the pandemic crisis. AAL could also use a favorable industry headline, but the Ukraine conflict is far from finished. The reaction to that will come on Wednesday, so I expect trepidation heading into it. The indices need to also help out by stabilizing this week, which should be a challenge on unavoidable Federal-Reserve-related headlines. Therefore, on rallies, AAL stock will face sellers around that area. The correction on March 4 unfortunately created a wall of resistance around $15.40. This alleviates the need to be surgical in finding a bottom. Leaving room to add in the balance later makes for a better overall entry price. It would be smarter to average into the full risk to hedge against potential downside. Regardless of conviction and patience, we shouldn’t take full position in one lot. It might still take time to recover, so investors should account for longer time frames. Therefore, my assumption is if AAL stock falls into that, it should be a buying opportunity for investors. The low last week came pretty close to that. In 2020, AAL rallied 140% from around $11 per share. The industry is barely out of the “ICU,” and here it is, facing another ailment. They cannot catch a break, and this is another test they have to endure. The Russia-Ukraine conflict hits airlines squarely in the pocket. However, for the immediate future, AAL stock is still in danger from the overall geopolitical risk. The plan would be to buy the base for impending upside potential. This should translate into support for AAL on the next dip. I see a bunch of potential buyers today with its current prices. This current slide should be no different but they will need the whole market to cooperate. They have been completely loyal to it throughout and bought dips twice for 150% rallies. However, these policies are loosening a bit, so they could approaching operation normalcy in the U.S.įans of American Airline stock deserve a round of applause. Government mandates for employees and travelers have also thrown a wrench in the cog. The company is slowly but surely inching its way back, but there are still hurdles in the way. Appropriately, American Airlines’ stock is also 70% above its March 2020 lows and 41% below late 2019 levels. While sales have increased 70% from 2020, they are still 35% below 2019. Even the metrics are signifying the same thing. This is especially true since outbreak headlines are still floating around. Although the airline business has improved, the space as a whole is still far from having clear skies. The bears are in charge, as we saw last week with AAL stock falling 19% in two days. Meanwhile, the stock should continue to ping-pong between $12 and $26 per share. The current task for American Airlines is for it to climb out of its pandemic-induced rut and rebuild its business. ![]()
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