Is it too late to short airlines?
Answers
4107 points
MNSL answered 2 years ago …
I think we will see more volatility in the Airlines shares through out the world in the short term.
It looks like to me Airlines as Contrarian buy now. You should buy best airlines in the world.
Pl see following web site: dated June 29, 2008.
http://seekingalpha.com/article/83128-are-airlines-stocks-a-contrarian-opp ortunity
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All secular bull markets face corrections — even oil. These corrections tend to be brutal. So you can expect oil prices to post a savage correction. When that happens, the industries that have been handcuffed by high oil prices will post major reversals — including the best-managed airlines.
4087 points
EthanR answered 2 years ago …
I agree with MNSL. A couple of the airlines have shown decent relative strength lately. It all depends on whether you believe oil will continue to rise, or if the bullish trend has reversed. The airlines will trade opposite whatever oil does.
Of the airline stocks, I like LUV and JBLU the best. By the way, Jim Rogers recently said on CNBC that he too is buying airline stocks right now. His track record is pretty good over the years!
4107 points
MNSL answered 2 years ago …
When Jim Rogers is trying to buy airlines stocks, we must look at oil market in a different perspective.
I think he too must have realized that oil prices to come down in next 02 years. It is true in the long run oil prices can go up. That also depends on world demand, invention of cheaper alternative energy and new oil fields in new countries etc.
Nevertheless, we always get corrections, crashes, bears time to time in any bull market. Therefore, oil should come down sooner than later. Currently we are experiencing a strong correction in the industrial metal sector and I think it is the beginning of bear market for that sector. Sooner than later same bearish trend will spread to other sectors of the commodity market.
Some experienced investors have specialized in the Airlines sector. They know when to buy and when to sell. If you are new to this sector then you should do thorough research before putting your money in Airlines.
106 points
vision answered 2 years ago …
the price of crude will have a direct reflection on airline stocks , and the out come of the united states meeting with iran will have a direct affect on crude oil. So I would wait to see the out come of this meeting in geneva.
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maharoger answered 2 years ago …
I am thinking about shorting CAL, Continental Airlines, again. I stopped shorting it when it got down to 10 a few weeks ago, but the stock price moved easily below that level. The earnings (loss) report is out of the way now and this stock pays no dividend. They are also not very good at hedging fuel costs, unlike Southwest Airlines (LUV), soooo here is a great oil-related trade. The intraday volatility is huge, the range on Friday was about $1.50, which is 15 percent on a $10 stock. I would only short it if oil is trading higher before the stock market opens. This would be a very short term trade, overnight or just for the day. The upside is explosive on this stock at this level, as we saw last week. However, I can't bring myself to go long because the downtrend and the fundamentals supporting it are so strong. If you can short it and make 50 cents or a dollar quickly, that's 5 to 10 percent. Very hard to find trades that are that lucrative in a very short timeframe.
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