Good Morning and welcome back from after the weekend!
I hope that you had a great time enjoying some time off. I used to hate the weekends not being able to trade the market. I had to force myself to find new creative things to do instead of mark up charts and read headlines.
Now that its Monday morning we can get prepped up and ready to start trading this 3rd week in September! There is a lot of pressing events that have occurred around the world that can affect our U.S. Stock market and even affect us on the consumer side.
So lets take the time and just review some of the current ideas we are trading and follow up with seeing what ahead for this week.
Looking Back at Last Week
This chart is taken on the 5 min chart to show the progress of the last week on the Dow Jones Industrial Average (DJI). I personally do not trade the Dow Jones directly but I use it to help paint a better understanding of the overall market trend.
Over the last week from the 9th of September we can see how the market has been moving up well towards the $27300 price level where we see that it stalled out a little. Up at the top of the chart we see how price spikes up to test on the zone the first time on the strong impulse.
Shortly after on the 12th of September we see those three wicks touching the resistance line and unable to gain the strength to push up. For technicians this can signal rejection of that price level. As we see how price drops off quickly before the close of the 12th to open up with gap on the 13th. This started the current descending pattern underneath the $27300.
Stocks set to open lower on the open
This morning the S&P 500 Futures has been down about .04% which signals that the us stock will open on a low note on the start of Monday morning. This is happening after failing to break past the previous all time high on Friday.
We experienced a strong rally from last week across the board and many are seeing a bit of correction needed to help balance that impulse move up.
|STOCK||WEEKLY||NEXT EARNINGS||YEAR TO DATE (YTD)|
|BOEING (BA)||+ 5.85%||OCT 25TH||17.76%|
|SPIRIT (SAVE)||+ 7.25%||OCT 31ST||-33.08%|
|FEDEX (FDX)||+ 3.99%||SEP 17TH||7.92%|
|JBLU (JBLU)||+ 2.11%||OCT 24TH||8.28%|
|HAWAIIAN (HA)||+ 11.35%||OCT 22ND||7.38%|
|AZUL (AZUL)||+ 6.57%||NOV 11TH||34.78%|
|ATLAS (AAWW)||– 7.12%||NOV 7TH||-35.72%|
|FLY LEASING (FLY)||+ 0.24%||NOV 14TH||101.80%|
|LOCKHEED (LMT)||+ 1.22%||OCT 23RD||46.98%|
Above you can see a portion of our aviation watchlist. I track a list currently of about 35 aviation stocks and trade them on a regular basis. I seldom trade outside of my list for these are the 35 stocks that I am essentially becoming an expert on.
By narrowing down your attention from thousands of companies to a set that works better for you the amount of time spent looking up information will be greatly reduced.
This week we only have one earnings reports and it should be an eventful one for FedEx. We see up top how this last week they ended up just under 4% growth and over all sitting at just under 8% gains on the year.
Last earnings were not the best for FedEx as they lost some business with Amazon which is one of the largest clients in the world in terms of transportation and logistics services.
This is the same chart that I had posted a few weeks back when we were looking at how price was trading within the range. We saw how price broke down into the range and tested within for a majority of the month of August. As September started off and some bullish traders came back from their summer breaks we see price soar up and sit right under $175.
If you look closely at the top end of the rally where there is an exhaustion wick ending with selling intend at the $176 this would signal to technicians some resistance at that price level based on previous highs. Before we can see price continue on the rally we will need to see price break up above $176 and create a new resistance.
Just based on our previous channel I copied and dragged the trend line up towards the top to show an area of where we could look to see the next potential retest. Keep in mind earnings will play a huge roll in the future of this stock over the next week. The earnings report can have the potential of pushing FDX past its previous resistance and out above $180 if the report is strong.
On the other side look for the few days prior to earnings to see if any news or company insight towards their earnings comes out. Remember that when reading media headlines about stocks earnings reports its important to take into consideration all the context of the information to best prepare for the news release.
Spirit Airlines (SAVE)
The bright yellow bus of the sky! Many travelers would choose Spirit Airlines for their competitive rates and cheap fares that include a seat and access to place an item underneath the seat in from of you. Everything else beyond that was considered an add-on. With aims towards being one of the most profitable budget airlines in the business, enhancing the quality of flight for the customer was not the highest priority.
That is until recently with new CEO Ted Christie taking an approach towards more reliability and customer service. The first area of opportunity they saw was in the quality of seats.
The new seats provide for overall enhanced features and amenities that the customer will certainly take notice of. We are talking extra padding, addition pre-recline seats, enhanced lumbar support and they have added on feature which they aim to help fill up the cabin quicker. Unlike any other Spirit airlines seats before these will be equipped will a full-size tray table!
The middle seat will now have an extra whole inch of seat width. Now you are probably thinking what difference in 1-inch going to make in a seat on a plane. They are probably going to try and charge us extra now for the middle seat being that its a middle seat.
Well if you second guessing yourself or doubting if anyone else will see the value in this seat map adjustment just remember back to when apple announced their screen was going to be an Inch larger. It was revolutionary.
People went running to the store to line up and get the new phone with the additional inch. Maybe Spirit Airlines found the secret to making the middle seat attractive. Would you sit in the middle seat if you knew your seat was “extra wide”?
Atlas Worldwide (AAWW)
I was sitting at the edge of my seat watching Atlas fall sharp near the end of last week Friday. We saw the bearish market take over and a massive 8% rejection to the downside took place just after lunch time.
After hours they managed to recover a bit of losses from the Friday sell off and today we have not seen any major headlines or events taking place that could directly cause the stock to push down so quickly .
When we don’t have news in place we look for technicals to understand the current move. Below you can see the same chart that we have been tracking over the last few weeks. Near the end of the day we see strong red selling volume come into the market.
We see how price tested around the trend line that we had drawn to only test and reject the price sharply. We can see a strong downtrend confirmation based on this techincal chart.
Notice how the candle are larger than most and occur near the end of the week. These kind of move was done by a large institution that had a large position in Atlas they the closed out on. Seeing smart money move out of a stock is never a good sign.
There is a great deal of risk when trading stocks that move shrpy like Atlas did over this last weekend. These kind of trades although have the potenntila to create exponential returns in short period of times, it is important to understand that also means losses can be exponential in a short period of time.
Stay connected for most trade ideas to come this week. Make sure to check out Tradingview and Stocktwits to connect and share you ideas on any of the stocks I trade. I will be looking to start a Options mastermind group soon. Make sure to leave your email below if you want updates on the mastermind group as it launches!