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Vitalii Liubimov's Avatar
published in Blogs
Jun 21, 2019

American Airlines (AAL) hits trend line again, gets another bearish signal

Back on May 8, I wrote a bearish article on American Airlines (NYSE: AAL). I cited a downward sloped trend line, a bearish crossover from the daily stochastic readings, and a bearish signal from the Tickeron Trend Prediction Engine as the reasons for the bearish posture.

The stock was trading just under $34 at the time of that blog entry and it would eventually fall to $27. The stock has since rallied back, but it is running into the same downward sloped trend line again.

We see that the daily stochastic readings just made a bearish crossover, just as they did in early May. The Tickeron Trend Prediction Engine just generated another bearish signal as well. This signal came on June 17 and it showed a confidence level of 69%. Previous predictions on American Airlines have been successful 79% of the time. This signal calls for a decline of at least 4% over the next month.

American’s fundamentals are part of the reason for the downward trend. The company’s earnings have declined by 18% per year over the last three years. Earnings fell by 30% in the most recent quarter. Sales have barely increased at all, increasing by only 4% per year.

The company’s return on equity is neutral right now and the profit margin is below average at 6.3%.

Related Ticker: AAL

Momentum Indicator for AAL turns positive, indicating new upward trend

AAL saw its Momentum Indicator move above the 0 level on October 11, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 91 similar instances where the indicator turned positive. In of the 91 cases, the stock moved higher in the following days. The odds of a move higher are at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AAL advanced for three days, in of 276 cases, the price rose further within the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 187 cases where AAL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The 10-day RSI Indicator for AAL moved out of overbought territory on October 31, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 20 similar instances where the indicator moved out of overbought territory. In of the 20 cases, the stock moved lower in the following days. This puts the odds of a move lower at .

The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 56 cases where AAL's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for AAL turned negative on November 04, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where AAL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

AAL broke above its upper Bollinger Band on October 16, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AAL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.000) is normal, around the industry mean (3.946). P/E Ratio (33.310) is within average values for comparable stocks, (42.441). Projected Growth (PEG Ratio) (0.187) is also within normal values, averaging (0.965). AAL has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.039). P/S Ratio (0.176) is also within normal values, averaging (1.404).

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AAL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.

Notable companies

The most notable companies in this group are Delta Air Lines (NYSE:DAL), United Airlines Holdings (NASDAQ:UAL), Southwest Airlines Co (NYSE:LUV), American Airlines Group (NASDAQ:AAL), JetBlue Airways Corp (NASDAQ:JBLU).

Industry description

Airlines industry comprises passenger air transportation, including scheduled and non-scheduled routes. This can include charter airlines, as well as regular commuter ones. Discount pricing and the rise of low-cost carriers over recent decades have expanded the industry by making its services accessible to a much larger global population, compared to the older days when airline travel was a relative luxury for many people in the world. Delta Air Lines Inc., Southwest Airlines Co and United Continental Holdings, Inc. are some of the airlines with the largest stock market capitalizations in the U.S.

Market Cap

The average market capitalization across the Airlines Industry is 6.54B. The market cap for tickers in the group ranges from 9.36K to 40.21B. DAL holds the highest valuation in this group at 40.21B. The lowest valued company is KLMR at 9.36K.

High and low price notable news

The average weekly price growth across all stocks in the Airlines Industry was 3%. For the same Industry, the average monthly price growth was 7%, and the average quarterly price growth was 2%. NRSAF experienced the highest price growth at 34%, while AIABF experienced the biggest fall at -16%.

Volume

The average weekly volume growth across all stocks in the Airlines Industry was 29%. For the same stocks of the Industry, the average monthly volume growth was 44% and the average quarterly volume growth was 119%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 60
P/E Growth Rating: 58
Price Growth Rating: 52
SMR Rating: 66
Profit Risk Rating: 92
Seasonality Score: 37 (-100 ... +100)
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AAL
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A.I.Advisor
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published General Information

General Information

a provider of air transportation services for passengers and cargo

Industry Airlines

Profile
Fundamentals
Details
Industry
Airlines
Address
1 Skyview Drive
Phone
+1 682 278-9000
Employees
132100
Web
https://www.aa.com
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