Is the airline stock trade back? As travel plans ramp up for the pandemic weary, SAVE stock has already provided multiple swing trading chances and just might do it again.
XSwing Trading Example: Spirit Airlines Stock
Spirit Airlines (SAVE) is going for its third try on SwingTrader in the last two months. It originally jumped onto the current trades idea list the beginning of February (1) after finding support at its 21-day moving average line. Stocks focused on reopening after the pandemic were in favor and SAVE stock was among the leaders as reflected in its relative strength line. We quickly took a third profit after reaching an 8% gain (2) and again when we hit a 13% gain (3).
Our exit in SAVE stock on that first trade (4) wasn't due to any particular fault in the chart. The inside day after a strong move wasn't concerning. But as a rule, we don't hold through earnings. Our early exit missed a strong up day but also missed the drop on earnings when they were released (5). We were happy with our exit price in retrospect.
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After a brief rest, Spirit Airlines stock started moving again (6). It wasn't quite a breakout but neither was it a reversal. We ended up passing on the trade and unfortunately missed out on another strong move.
Airline Stocks Take Off Again
Just because we missed a trade didn't mean we let SAVE stock drop off our radar. We started a little differently, though. Noticing that all the airlines were showing upside reversals on March 8, we went with broader exposure and added the US Global Jets ETF (JETS) to SwingTrader (7).
A little twist this time was that we took our first third of profits in the JETS ETF while we added SAVE stock back to SwingTrader (8). As airline stocks continued moving we unwound the higher exposure in the space by taking a third profit in both JETS and SAVE stock the next day, selling into the strength (9).
Another Chance For SAVE Stock?
For the past couple weeks making headway anywhere got tougher. Reopening and rotation plays were falling out of favor. We eventually removed both the JETS ETF and SAVE stock as they looked to close below their 10-day moving average lines (10).
Using the shorter moving average line will knock you out of position trades too quickly. But it's a useful tool for the shorter time frame of swing trading.
In this case we avoided the larger drawdown that unfolded over the past week. But after coming down near its 50-day moving average line, SAVE stock had a big reversal along with many other leaders (11).
It warranted another try for SwingTrader, although this time we stuck with a half position due to the higher risk.
More details on past trades are accessible to subscribers and trialists to SwingTrader. Free trials are available. Follow Nielsen on Twitter at @IBD_JNielsen.
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SAVE Stock May Be Ready For Takeoff Again - Investor's Business Daily
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