American Airlines is Declining, Will the Bulls Come to Rescue it?

• Jefferies maintains the “Hold” rating on the American Airlines stock.
• AAL stock is currently trading at a 52-week Low Level.
• American Airlines stock’s price is declining sharply, corrected by over 38% from the year’s high level.

American Airlines stock has reached its peak in the year of 2018. After that, it has started a downward trend. This trend is still running as the stock price has been corrected by about 80% since then.  However, the stock has tried to participate in the post-COVID-19 pandemic rally that happened in the global market. It has surged by over 210% in just 1 year.

American Airlines stock created a swing high, which is also a high of 3 years time frame at $26.04. From this level, the stock has continuously fallen and is currently trading at $11.94, which is more than 50% of it. The overall weakness in the Airline sector is causing problems for the stocks. The global slowdown along with Middle East conflicts has raised the oil price to higher levels.

American Airlines has been rated with a “HOLD” rating by the rating firm Jefferies. It has also cut down the target price from $16 to $15 of the stock. This can be a negative sign for the stock. However, the positive thing about this is the Target price of the stock is still 25% away from the current levels. So, this can boost some confidence for the traders to take a precise trade to target the gains.

Synopsis of the American Airlines Stock Chart

AAL stock price has formed a symmetrical triangle pattern on the daily chart and has recently given a breakout from it. This pattern was very well respected by the stock price and after retesting it is currently sustaining below that. The stock is trading below the 50-day and 200-day Exponential Moving averages, which is a bearish sign. Along with it, the stock has recently witnessed a death crossover on the daily chart.

AAL stock is already in a strong bearish grip and it has recently given a breakdown from the pattern. It will further create pressure on the stock. The nearest support for the price is present at the level of $8.27. Furthermore, the resistance level for the stock price is present at the level of $19.33 and $26.47.

What Bollinger Band and Relative Strength Index is Indicating?

The AAL stock price initially closed below the lower band of the Bollinger band indicator but closed inside it yesterday. This shows that the stock can show some reversal according to the indicator. The Relative Strength Index is currently placed at the level of 32.49. This indicates that the price is oversold and it can show some bounce.

Conclusion

AAL stock price has given a breakdown from the symmetrical triangle pattern which indicates bearishness.  However, the indicators suggest some reversal from here. If the price reverses from here then it can face resistance near the level of $19.33 and $26.47. $8.27 will act as support.

Technical Level

Resistance – $19.33 and $26.47

Support – $8.27

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.