The darlings of the market just a few weeks ago, the airline stocks are now down 25-40% in a matter of 2 weeks from their peaks. These make for excellent hedges if you think oil is headed to sub $100 but even with a $10 spike in oil these stocks have cratered. Risky business. Interestingly all the charts look identical - and the stocks are now all at the 50 day moving average. One sample chart
Ironically, my sarcastic post literally called the top... to the exact day. [Aug 19: Best Stock on the Planet: UAL] The question will be, will this support level hold. With hurricane Gustav causing hedge fund computers to go into overdrive and buy all the natural gas stocks they've been selling relentlessly for 2 months, it's probably too early but I am still keeping these on the radar (sorry could not resist) in this "trading market" where what is awful one week is the market's favorite 3 weeks later. With the hurricane being "priced in" by Friday/next Tuesday, I'd expect the quantitative hedge funds to start selling off all these nat gas stocks they are buying now for a quick gain, and then return to the normal trend. We'll see. If it works out that way, then they will rotate into the airline stocks - and so we go in the current era of "investing".
UAUA down 33% from peak
AMR down 38% from peak
DAL down 25% from peak
NWA down 30% from peak
CAL down 26% from peak
Keep it mind "peak" was 2 weeks ago or less for these "playthings" of the hedge funds.
[Aug 22: USA Today - Airlines Emerge from Profit Killing Oil Slick]
No position
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