Posts
Shorting Southwest Airlines
25
@greenmask9
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1 min read
Southwest Airlines is an American airlines company. Unfortunately, high oil prices and high prices, in general, are not good for this company. Technical makeup looks promising too.
Why I choose to short Southwest Airlines
- The price touched $50.00 two days ago. The reversal was very swift suggesting that the algorithms were waiting for this price to be touched (be it profit taking or short opening).
- Three previous peaks have been broken, yet the price quickly reversed after violating these levels. This suggests that the point of breaking these levels was merely to close longs in a very liquid area with plenty of stop orders. Institutions need extra liquidity to close their massive positions.
- Southwest Airlines has been trading between two somewhat converging trendlines. Currently, we are sitting at the top of the channel reducing risk for shorts and offering a decent payout should the structure remain in place.
- Lastly, I don't believe that the current fundamental environment is good for this industry.