Southwest shares are currently sliding inside a defined down channel as we head into the next earnings print. Price is testing lower levels and the next structural support sits around the $41 area, which has held previously. The RSI remains soft, suggesting limited upside momentum for now.
Macro/context: Southwest is in a transition phase on its revenue mix. After decades of its “bags fly free” model, the airline has shifted to assigned seating with premium and extra-legroom options, alongside newly introduced checked baggage fees as part of a broader effort to lift revenue per passenger. Management has outlined that these ancillary streams (paid seat choice, bag fees, new fare bundles) are expected to contribute materially to earnings and help boost margins as the business evolves. 
With earnings near, watch how guidance around these new revenue initiatives influences the reaction off support at ~$41 and whether the falling channel continues to cap strength.
Macro/context: Southwest is in a transition phase on its revenue mix. After decades of its “bags fly free” model, the airline has shifted to assigned seating with premium and extra-legroom options, alongside newly introduced checked baggage fees as part of a broader effort to lift revenue per passenger. Management has outlined that these ancillary streams (paid seat choice, bag fees, new fare bundles) are expected to contribute materially to earnings and help boost margins as the business evolves. 
With earnings near, watch how guidance around these new revenue initiatives influences the reaction off support at ~$41 and whether the falling channel continues to cap strength.
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Use your TradingView charts to trade your Alchemy account: bit.ly/42vUfjL
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Use your TradingView charts to trade your Alchemy account: bit.ly/42vUfjL
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Trading leveraged products carries a high level of risk and may result in losses exceeding your initial investment; ensure you fully understand the risks involved.
-
Use your TradingView charts to trade your Alchemy account: bit.ly/42vUfjL
-
Use your TradingView charts to trade your Alchemy account: bit.ly/42vUfjL
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.