American Airlines Rallying on Falling Oil Prices, but Remains in Downward-Slope
Oil prices have fallen each of the last 12 days and that is a record for consecutive down sessions. With the big drop in oil prices, airline stocks have performed really well. One such stock is American Airlines (Nasdaq: AAL) and it has jumped almost 25% in the last three weeks. Keep in mind that the S&P 500 is up a whopping 2.5% in the last three weeks.
Despite the sharp rally by American, the stock is facing some resistance just ahead in the form of the upper rail of a downward-sloped trend channel. The upper rail is the result of connecting the highs from March and September while the stock has hit what looks to be the lower rail on several occasions.
The daily stochastic readings are already in overbought territory and the 10-day RSI is close. When these indicators have both been in overbought territory is when the stock has experienced the most problems over the last eight months.
American’s fundamentals are interesting because the earnings have been declining, but the profitability measurements are pretty good. Over the last three years, earnings have declined by an average of 21% per year. They declined by 25% in the most recent quarterly report and analysts expect an EPS decline of 15% for the year.
Despite the declining sales, the return on equity is at 67.5% and the profit margin is at 9.9%. This mix of measurements is rather odd and could explain the longer-term downtrend. Of course, if oil prices continue to fall, the fundamentals could change dramatically in the coming quarters.
AAL in downward trend: 10-day moving average moved below 50-day moving average on January 29, 2026
The 10-day moving average for AAL crossed bearishly below the 50-day moving average on January 29, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on February 19, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AAL as a result. In of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for AAL turned negative on February 19, 2026. 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 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
AAL moved below its 50-day moving average on February 11, 2026 date and that indicates a change from an upward trend to a downward trend.
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 .
The Aroon Indicator for AAL entered a downward trend on February 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AAL's RSI Oscillator exited the oversold zone, of 39 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AAL advanced for three days, in of 284 cases, the price rose further within the following month. The odds of a continued upward trend are .
AAL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call 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 fairly steady price growth. AAL’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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: AAL's P/B Ratio (0.000) is slightly lower than the industry average of (2.799). P/E Ratio (73.294) is within average values for comparable stocks, (40.456). Projected Growth (PEG Ratio) (0.097) is also within normal values, averaging (2.109). AAL's Dividend Yield (0.000) is considerably lower than the industry average of (0.034). AAL's P/S Ratio (0.151) is slightly lower than the industry average of (0.638).
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 76, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a provider of air transportation services for passengers and cargo
Industry Airlines
Advertisement