Talking Numbers

Why cramming passengers has been good for airlines

Talking Numbers

Why cramming passengers has been good for airlines

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Why cramming passengers has been good for airlines

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This sector could be the best bet this year

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This sector could be the best bet this year

How much higher can an airline go?

Well, for Southwest Airlines, that's a good question, at least as far as its stock is concerned. On Friday, it traded at a record high price of $27.83 per share. Since the start of the year, Southwest is up nearly 37 percent. And, over the past 12 months, shares have gained 79 percent.

(Read: Some airlines are trying again to raise US fares)

However, the technicals are a hold according to Ari Wald, head of technical analysis at Oppenheimer & Co.

"On the one hand, if you're in this stock, [there's] no reason to sell it," said Wald, who sees very strong technicals in place. "Near term, though, I don't want to chase strength. I'd rather be a buyer on weakness. I think you can be tactical."

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Wald sees the stock as having traded in a $2 range between $22.50 and $24.50 per share. He believes it will return towardthat range before heading back up to $26.50. 

"I'd be looking to buy it on the test back to that prior range at $24.50 or a little below," recommends Wald.

(Read: AirTran's final flight scheduled for December)

The fundamentals agree with Wald, says Ron Dottin, senior quantitative analyst at RBC Capital Markets.

"If you own the stock, there's no reason to sell it and there's long-term upside," Dottin said. "The stock could probably rise another 6 percent from here. The airline industry has been great over the last few years as they've reduced capacity, crammed in passengers, to pile up profits. And, we don't think that trend will stop."

To see the full discussion on Southwest Airlines, with Wald on the technicals and Dottin on the fundamentals, watch the above video.

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