$AAL - Drop and GoThis week I have been following American Airlines closely. My past self would’ve been absolutely horrified with what’s being going on in the airline industry, but now that my mindset has switched towards a technical approach, I couldn’t be any happier. The airline industry has both, the volatility and volume, desired to enter a trade. Here are some of my observations and conclusions:
1 - AAL heading towards its support level, which is set at 10.24 based on short term projections of 100 bars. This means the stock is ready to fall at least an extra 20% from its current price of 13.01.
2 - Resistance level is at 28 based on the same projections from above. Great room for growth within the next 6 weeks, however my exit target is set at 15$ 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.
What will I do?
Entry Target - 10.30
Stop loss - 9.00
Exit Target - 15.00
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.
