Who is Mesa Air Group?
Mesa Air Group, INC (NYSE: MESA) is a holding company which primary subsidiaries operate regional air carrier services for various airlines in the United States and Canada. Chances are you have flown on a Mesa Air Group own Aircraft and you didn’t even know it.
Mesa Air Group does not fly aircraft its the holding companies name. They provide regional service to schedule passenger and airfreight.
The 2 most well known airlines which they serve are United through their regional carrier United Express and American through American Eagle. Do those names sound familiar?
The company owns over 145 aircraft in their fleet which operate under Mesa Airlines, INC. With over 3400 employees they have been able to maintain strong growth over the last few years and have recently successfully launched their IPO.
This can sometimes work in our favor as investors or against us as there is not a lot of historical data on the public records of the company.
Mesa Air Group 28.6% Rally!
One of the main catalyst for the stock price of mesa to skyrocket upwards was due to a recent announcement which was made conveniently a few days prior to earnings.
Since the start of December 2019 we have seen the price of MESA jump up nearly 30% in just under a week. When we look down to the bottom of the chart we see the volume candle bar graph.
The height of the bar shows an increase in trade order. The color of the bar in the volume section of the graph tells you the dominant order, Green for buys and red for sells.
Mesa announced that they would be adding 20 Brand new Embraer E175 to the United Express Fleet. These aircraft will feature 70 seats with a three-class cabin for maximum level of service capacity to their guest.
The beautiful aircraft are schedule to be delivered by the begining of may 2020 and complete by end of the year. In great excitement United Airlines completes the deal with agreeing to extend current contracts for aircraft for years the next 5 years.
This are all positive factors that are driving buyers into the market as there is increased open interest in the stock. Overall as we look more into the other factors that are at play we can see that signs are looking optimistic!
Upcoming Earning Report
On December 11th of 2019 Mesa Airlines will be releasing their 4th Quarter earnings report. This can be viewed directly from their website to see the full in detail report if you so desire. The presentation will begin around 430 EST and will go over the details regarding how their last quarter performed and what their outlook for the next will be.
Some of the main elements that are taken into consideration during Earnings releases are Revenue, Earnings per Share, and outlook. Revenue is optimistic to show growth consecutively. Being able to hit the forecast amount is key in driving price higher. Being unable to meet the forecast level could potentially cause some bearish behavior. j
Earnings per share or EPS is an important financial measure, which indicates the profitability of a company. It is calculated by dividing the company’s net income with its total number of outstanding shares.
Then the outlook will determine if there is signs of continuing growth for the next quarter to come or is the company projecting there to be more conservative forecast for the months to come in the future.
How ever the news release plays out there will be dramatic movement in the price of the stock on the 12th of December once the news has settled and the market is open once again for another trading day.
I never encourage new traders to start crowding their chart with plenty of lines and formations that can potentially distract you from the actual price candles themselves. We are currently experiencing a downtrend over the last year.
Price has been coming down and testing at the maint key price levels. we can see clearly ever time that price touches one of the key levels drawn there is a break and retest before continueing to new levels.
Price is currently is a sideways slightly upward channel. I used the two lower blue lines to create the range of the channel. Then I cloned the same angle of the lines on the channel to drag them up towards the top channel to create the full range of the price.
Now when we look at price in relation to the 3 trend lines we see how price is currently sitting on the median. If we look back at the last time that price was at the median it rejected and fell down forming the bottom of the channel. We do not want to enter in bullish positions at the top of our price range.
Although the stock has been climbing up buying in near the top leaves us with a lot of room to fall. We want to aim to buy near the dips of the market and ride up towards the peaks. Right now we are sitting at one of the peaks pushed up against the trend line from the previous peak.
Remember there is no right or wrong way to mark a chart up. It is simply a method that investors use to be able to determine price points of significance. The key most important factors that affect a stock price are news and fundamentals with technicals playing in respect to those elements.
Proper Risk Management
Taking precations to protect your capitol is key for investors to control how much risk exposure they have in a current trade. Leveraging various strategies of buying a put option to protect your risk to the downside would be beneficial for those who may potentially have a positive bias.
In the same notion if you are looking to potentially short the stock prior to the news being released you could also purchase an out of the money call option to then allow there to be a potential gain in the even that the stock does rise up in the next week.
We are currently working on some downloadable training material to better explain some options strategies that we use in our trading. It will include the basics from options are to how they are used in the market. I am even going to cover how you can find and take action on some of the highest earning options strategies.
The book will cover from all the basics going into some advanced strategies that can be implemented today! We have been putting together resources and education from some of the top organizations in the world to provide you the streamlined training course on how you can start trading options.
Make sure to sign up for notifications so that you can be the first to get a copy of the E-book when it is released.