While investors proceed to concentrate on opportunities in growth sectors, I proceed to search out actionable ideas in more value-oriented areas of the market. So far in 2024, the Industrial Select Sector SPDR Fund (XLI) has actually outperformed the Nasdaq 100 ETF (Invesco QQQ Trust) by about 2%, and my weekly scan for brand spanking new swing highs has yielded a variety of latest ideas in the sector. While a few of these charts seem a bit overblown at the end of the first quarter, the airline group is showing charts that may be earlier in the uptrend. We’ll analyze the chart of the U.S. Global Jets ETF (JETS) and show how Alaska Air Group (ALK) can capitalize on its strong momentum in the second quarter. After peaking around $22.50 in July 2023, JETS sold off to ultimately retest the September 2022 low around $15. Last November saw a dramatic improvement in the airlines’ situation, and by mid-December JETS quickly made up for greater than half of its losses. In 2024, we saw a series of upper lows in January and March, with the latest low near $19.50 aligning well with previous resistance in December and January. The momentum is impressive in comparison with the October low, and the RSI (relative strength index) stays above 40 after declines in January and March. When an ETF is in a rally, the RSI often becomes overbought on rallies and tends to remain above the 40 level on pullbacks. So based on price dynamics and an easy evaluation of price motion, it appears that JETS is in a solid uptrend at the end of the first quarter. Alaska Air Stock Is Just Getting Started Alaska Air Group recently broke through a key resistance level and will be a gorgeous option for investors on the lookout for stocks earlier in the uptrend. From the October 2023 low of around $31, ALK quickly moved higher to check the 38.2% Fibonacci retracement level, which regularly serves as an initial resistance point. Alaska remained below the retracement level and falling 200-day moving average until this week. We now see ALK strength above $42 with an initial upside goal at the 61.8% retracement level near $47. The momentum has been consistent with bullish growth, with Alaska being overbought this week after rising rapidly. While overbought conditions may point to a short-term pullback in the coming weeks, we’re inclined to assume that this uptrend may be just beginning. —David Keller, CMT marketmisbehavior.com DISCLOSURE: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO PURCHASE ANY SECURITIES OR OTHER FINANCIAL ASSETS. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE CIRCUMSTANCES. THE ABOVE CONTENT MAY NOT BE APPROPRIATE IN PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING THE advice of your individual financial or investment advisor. Click here to read the full disclaimer.
The charts show that the uptrend in this airline’s shares may be just beginning
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