With the boost of the vaccine, customers return to the air to travel. Airline shares were shut down in the course of the pandemic and have yet to return to the air.
American Airlines Group Inc. (NASDAQ: AAL) and United Airlines Holdings Ing (NASDAQ: UAL) declined 27% and 32%, respectively, from their share prices in February 2020, but the stock is flashing bullish signals.
See also: 2 airline stocks that have been on a strong upward trend all year
The American Airlines ticket: American Airlines started with a small gap on Tuesday, but the dip was bought quickly. Although it has traded lower than recently, the downturn is expected if American Airlines wants to complete a bullish reverse head-and-shoulders pattern to tune in for a move to the overhead gap. The stock is trading below a resistance level of $ 22.58 and below both the eight-day and 21-day exponential moving averages (EMAs), which are bearish.
American Airlines hit a green dogi chandelier on Monday, which often appears above or below in a trend. This candlestick may indicate that the American Airlines stock will move higher in the coming days, which will also help determine whether the reverse head-and-shoulders pattern is playing out.
Bulls want to see the increasing bull volume in the stock and that it shoots up and gets $ 22.58 again as support. If the share of American Airlines can trade above the support level, it has room to move to the declining neck of the head-and-shoulder pattern. If this pattern is recognized, the stock should break through the neckline and trade back to the gap left at the back in February 2020 on pandemic news.
Bears wants to see American Airlines refuse resistance and not complete the reverse head-and-shoulder pattern. If the stock fails to break through resistance, it could drop further to the next support level at $ 18.94
The United Airlines card: Like American Airlines, United Airlines seems to be completing the right shoulder of a bullish inverted head-and-shoulder pattern. United Airlines’ shares are trading below both the eight-day and 21-day EMAs, but a higher rise on Wednesday will help the stock recover both EMOs as it is fairly close.
United Airlines hit a strong engulfing candlestick on Tuesday that would lead to higher share prices on Wednesday.
Bulls want to see the bull volume increase Wednesday through Thursday, and the stock move upward again toward the declining neck of the reverse head-and-head pattern. If United Airlines’ share can complete the pattern, it could move to $ 63.70 where it was rejected for consolidation on March 18.
Bears wants to see the reverse head-and-shoulder denied and a $ 53.26 loss support. If United Airlines loses the support level, it has room to drop to its next support level at $ 49.83.
AAL and UAL price action: Shares of American Airlines closed at $ 22.56. United Airlines closed at $ 56.66.
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