This week I have been following American Airlines closely. My past self would’ve been absolutely horrified with what’s being going on in the airline industry, but now that my mindset has switched towards a technical approach, I couldn’t be any happier. The airline industry has both, the volatility and volume, desired to enter a trade. Here are some of my observations and conclusions:
1 - AAL heading towards its support level, which is set at 10.24 based on short term projections of 100 bars. This means the stock is ready to fall at least an extra 20% from its current price of 13.01.
2 - Resistance level is at 28 based on the same projections from above. Great room for growth within the next 6 weeks, however my exit target is set at 15$ because I am working on reducing my holding periods.
3 - For the last 3 months, AAL (and to be honest every other airline stock) has had massive price movements of over 40% which I like because even if you don’t get to ride the full wave, a 10% return per trade is also great.
Given my portfolio size, I will be purchasing 200 shares. If my trade goes well, I am expecting a $940 from a 2,060 dollar investment. Even though 940 dollars is not much, my goal is to become really good at getting a consistent return percentage per trade.
If my trade goes badly, I am expecting to lose $260.
What events am I am waiting for?
-For the current price to close below the lower bollinger band 20 day period using the 1 hour candle stick chart .
-For the 9 day moving average to cross above the 15 day moving average using the 30 min candle stick chart.
Any thoughts? Is someone else trading this stock? If so, what is your plan and what’s your strategy and exit target? I appreciate any comments from experienced day traders than can help me learn some new things.
Yes, just ignoring reality...like all the rest...whatever floats your boat and makes you money...
techserve2020
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Excellent Analysis and approach, my recommendation is enter slowly, like in installments of 25. Consider adding UAL and AC as well, to diversify.
BTW, this is one of the best approach for the community out there, thanks for your work.
normaescobarca
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@techserve2020 thank you for your advice and will do. The price closes at an open today, which I still don’t understand why, but when have the markets ever been rational? Following your approach it’s a good way to reduce risk
Jovannoti
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Better take a look at the bigger picture love..$12.50-$10.50 range is very good to enter. Dont count the cents too much , you might miss a good trade for 20-30 bucks. Trade safe
normaescobarca
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@Jovannoti, really good advice, thank you and happy trading!
I think we would be luck if it hits 12.00... I would take techserve2020 approach but enter earlier maybe with a little more shares and feel it out. You can then add more to buy down your cost or add a chunk of it actually rebounds and set some limits. It’s also ok to take a $100,$200,$300 in profits. Too many people think too big, when they should be thinking more of small consistent profits
BeardedSince
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@Ksanti7 apparently I can’t type on iPhone :/ *spellcheck : “Lucky”, “if it”
normaescobarca
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@Ksanti7 I like the way you think and it’s true, techserve had some pretty good advice. Considering how irrational the markets are, I think that is the best approach to reduce risk. Thanks for your comment, I like learning from other traders as well :)
BeardedSince
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lol I’m flattered , I actually peeped some of your stuff a bit ago and it Seems like you’ve been doing this a lot longer than me ;). No one has all the answers and that is what this community is for!