Turbulence in the Market

Photo by eberhard grossgasteiger on Pexels.com

Ladies and Gentleman, please find your seat and fasten your seatbelts as this current market that we are trading within is subject to bring some turbulence.

We ask you to please keep your stops tight and secure any profits that you can when available.

Failure to take proper precautions in the current market condition can potentially lead to losses in your account, emotional stress, anger towards the market, and many other side-effects.

We ask that you please invest wisely and as always we thank you for choosing to trade.

Photo by Lina Kivaka on Pexels.com

choppy skies for investors

The last few weeks have been extremely rough conditions for investors and traders all across the board. We have seen the market fighting to decide on its direction as global economic pressure is pulling the market in each direction.

Tension between some of the largest economies in the world are between regaining a sense of balance in trade between nations.

The aviation industry has been respecting the overall market to a great extent with a few outliers that looks to defy the standard. We have been looking over the last few week over a few major players in the aviation industry over the last few weeks and its important to follow up on the stocks that you have been trading before.

Many times we get caught up in the news and end up switching out attention between so many different companies that we end up missing the moves we were looking for on other companies because we were distracted in other places.

This is part of the reason why I enjoy trading aviation stocks with a great percentage of my account value. The aviation industry plays such a vital role in manufacturing, logistics, tourism, and many more that it is a key player in just about any major industry.

Because aviation is so intertwined with so many other sectors it has greater stability due to it not being reliant on just one type of business. Lets take a look back at some stocks that we talks about on previous blog post and review how they have been doing.

Alaska Air (ALK)

Above we can see Alaska Air on a 4 hour chart. When I mention that we are looking at a 4 hour chart that means that ever full candle on the chart took 4 hours to print. This view gives us a larger scale picture of what is going on in the market and where price is currently at in relation to previous levels.

The trend lines that I have drawn above are just based on the peaks of the trading range. This is not used as a reference as to how you should mark up your chart. This is just an example of how I would use trend lines to get a better idea of where price is trading within.

When drawing trend lines I personally draw some that are up-trending and others that are down-trending. This prevents me from developing a personal bias and being more open to seeing the market as one that moves both up and down as compared to in just one direction.

Alaska had experienced a strong summer from April to August where it continued to move upwards towards the high $65 range. As August started off we see a major sell off brought back by a rally to recover the losses. Now price is currently meeting at this point where we have two trend lines crossing.

Price is currently trading below the trend line and as long as it respects the price level and rejects the resistance than we can look forward to Alaska coming back down to lower trading prices.

Keep in mind on the fundamental side of things Alaska is continueing to show strong numbers and healthy load factors. With their addition of new routes and potentially new aircraft Alaska Airlines could very easily break the level and push up towards new highs.

Overall Alaska Air (ALK) provides great support for trading on and is a great stock to watch over the next few weeks.

Fly Leasing (FLY)

Fly Leasing has taken off after earnings and shown great strength in the weeks to follow afterwards. Back on August 21st we took a look at Fly leasing and how they had a great start of the year and were looking to continue to strength with great earnings.

Certainly enough Fly has not failed to meet our analysis and we have seen Fly rise up over 20% in the last two weeks.

Just when I thought that we had seen a resistance and were going to push down to lows again greater volume came in and just added jet fuel to the engines which just kept price soaring up.

FLY has broken through level after level on our Fibonacci channel. It has been clearing price levels with almost no hesitation and right now we are currently in the middle between two zones.

Although price can easily turn back around and come back to test on the previous level there is just as high of a probability for price to continue moving up till it hits the pressure at the next price level before it weakens in momentum.

FLY has certainly been an incredible ride up over the last two weeks. If you are also trading FLY how did you do on the move after earnings release? Are you still holding on to FLY? Did you secure your profits already?

With so much increase attention on FLY certainly I will keep a close eye to look for the next pullback to make my move.

Atlas Worldwide (AAWW)

Atlas Worldwide has been selling off like its going out of style. Over the last few weeks there has not been very many great days for Atlas. The stock has been taking a major beating with trade tension and pilot strikes Atlas has been fighting to stay in the air.

To look back at when we first traded Atlas Click Here.

Atlas just recently announced that they are not only renewing their lease on the corporate office but also looking to expand the square footage to be able to increase their work staff by about 100 new jobs.

This is part of their mission toward expanding their operational reach in being able to operate one of the largest fleet of B747F in the world.

Atlas based on previous trend lines has been just moving down by creating lower highs and lower lows over the last year. Looking at this last week we can see how we have finally gotten a bit of a push upwards from the base that looks to have been formed at just above the $24 price level.

Now we need to keep an eye to see if this is just a retracement on a downtrend and once price meets the next resistance it will just reject and push to new lows, or are we seeing a reversal in price off the $24?

If you are looking to potentially looking to enter Atlas on a long position look at an out of the money call. This would be available for a lower initial premium and would potentially provide substantial returns should the value rise above your break even price. This is not a recommendation just more for illustrative purposes.

If for example you are looking for Atlas to continue the downtrend pattern one could sell a Put for a strike price lower than what the stock is currently trading at.

Once the stock price drops below your strike price then the option you purchased can now be sold back to the market for a profit or you can choose to sell the stock at the strike price of the option if you already own the stock.

For more updates on a weekly basis of what stocks I am trading make sure to sign up for the Free Newsletter. This is where you get a preview of the stocks that I am going to be trading that week. As always wish you the best and happy trading out there!

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