American Airlines Group, Inc (NASDAQ:AAL) was falling over 7% Friday after the company released its second-quarter outlook ahead of its earnings print expected July 21.
The airline said that while it expects to report an increase in revenue compared to its previously released guidance for the quarter, soaring fuel costs continue to impact the company’s bottom line.
American Airlines expects to report revenues 11% to 13% above the same quarter in 2019, up from the 6% to 8% growth previously forecast. The company expects fuel costs to increase to between $3.92 to $3.97 a gallon — an increase of 33 cents per gallon over the previous estimate.
Despite upping its revenue forecast, the general markets weighed on American Airlines stock, with the S&P 500 slipping about 1.5% lower on Friday, causing a red day across many sectors.
If American Airlines can hold above its most recent higher low on this latest downturn, the stock may have more upside ahead.
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The American Airlines Chart: American Airlines reversed course into an uptrend on May 12, with the most recent higher high printed on May 31 and $18.22 and the most recent confirmed higher low formed at the $15.32 mark on May 24. If the stock is able to rebound and print a reversal candlestick above the most recent higher low, the uptrend may continue.
- If American Airlines closes the trading day near its low-of-day price, the stock will print a bearish kicker candlestick, which could indicate lower prices will come again on Monday.
- If the stock is able to bounce up before Friday’s session closes to form a lower wick, it could indicate higher prices will come on Monday.
- The volume on Friday’s decline may be a warning sign for bullish investors because it was measuring in higher than average. When a stock moves lower on high volume, it indicates the bears are in control as opposed to consolidation.
- American Airlines has resistance above at $18.28 and $19.35 and support below at $16.20 and $14.88.
