Since everyone loves when I make predictions. I think CAL will slightly break $10 on Monday and then close under $10. From there I see CAL going under $8. No, not straight down, but making lower lows and lower highs until it drops under $8.
Why? Long term trend is still down. Market is breaking down. $10 is the top end of the current bull channel and I believe it will test that channel, not make it through and then crash under the lower channel.
There is always a chance this is a reversal and breakout for CAL, but I'm just not seeing that as being likely in this market and current economic conditions so when I combine my negative feeling on the economy and the TA weakness in the market I just have to say this is simply a typical bear flag by CAL that leads to another leg down.
Watch this video. This guy has been saying exactly what I have been seeing in the market. The market could jump either direction, but a big move is very likely as the market is caught in a wedge that soon won't have any room to stay within it. The market has to either breakout of breakdown.
Tomorrow the odds are slightly in favor of the bulls and for that reason may not get the gap down in CAL I am looking for, but it would explain why I think LUV's chart is pointing toward $6.80 to $6.90 short term.
LCC chart is UGLY! It bounced off 20 day EMA today so that's not surprising.
Well didn't get the shooting star on CAL that I was expecting. It was one most of the day, but closed as a spinning top which is pretty indecisive. I am still leaning slightly toward a gap down tomorrow.
As for the general market, victory for the bulls and a possible bounce upward tomorrow. I was surprised how strong the bulls were late and I think it was due to the government pumping money into the market to push above 8300. It's hard to fight the government. They did the same thing during the Iraq war and won.
As for LUV I am expecting it to fill that gap around $6.80 and then head lower.
All this is subject to change upon any strength in the market. Technically this market should break down, but with the government pumping liquidity into the market it's hard to say what will happen. Maybe they can continue this rally which I think would be a big mistake. Why create another bubble scenario? Let the market move up on fundamentals when it's time rather than trying to build expectations too high and price in any recovery that may not come.
Anyway this week will be very interesting.
You lead your friend to water, but if he couldn't find the ladel, it's his problem. You watch LCC at all? Amazing load factor over there, a record for the month of June. LUV could only DREAM of putting up such a number. And LCC shares fall anyway...go figure.
I'm not sure. Oil was in the 40s in March while CAL was near $6. I suppose a sharp drop in oil could justify CAL moving up even in a general market decline. That would explain why this looks like a potential breakout for CAL even in the face of a weakening market.
I think basing airline movement on oil prices at the moment is very tricky. In past years a drop in oil was normally due to supply/demand based on travel an OPEC, but now the drop in oil price seems due more to the weakness of the world economy. True it's still somewhat supply and demand but it's being driven by different forces than we are accustomed to. Why did we have a drop in oil even with a reduction in inventory recently? I think it would take a real expert to understand the current relationships of oil prices to the economy.
To be perfectly honest the CAL chart is looking somewhat bullish, but I can't bring myself to buy into it. This is either early stages of a breakout or the top end of a resistance test. Next week will be very interesting for CAL and I assume other airlines will follow suit one way or the other but not in the same magnitude.