The airline bulls are out…
But they may soon get burned atop such lofty heights. They’re getting much too greedy. “Be fearful when others are greedy,” as we’ve learned from Warren Buffett.
Sure, oil is plunging to depths not seen for years, but it’s getting much too oversold, especially as RSI sinks well below 2008 lows. Once it bounces back, the airline stock will tumble.
In fact, if you take a look at American Airlines (AAL) money flow index (MFI), you can already see that money is flowing out of the name. MACD and RSI are also well over-extended to the upside.
At the same time, AAL is perched above its upper Bollinger Band. That’s not a sustainable move at this point. In fact, in most cases when it comes to AAL, the stock has a tendency to fail at that upper marker.
The move in AAL will fail… and the stock will come tumbling down.