US Airways Group, Inc., through its subsidiaries, provides air transportation for passengers and cargo. It offers scheduled passenger service on approximately 3,100 flights daily to 200 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America; and hourly shuttle service between Boston, LaGuardia, and Washington National. The company operates hubs in Charlotte, Philadelphia, and Phoenix; and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport. As of December 31, 2011, it operated 340 mainline jets supported by its regional airline subsidiaries and affiliates operating as US Airways Express, which operated 233 regional jets and 50 turboprops. US Airways Group, Inc. was founded in 1981 and is headquartered in Tempe, Arizona.
To review US Airways’s stock for potential trading opportunities, please take a look at the 1-year chart of LCC (US Airways Group, Inc.) below with my added notations:
LCC caught my attention due to the one basic price level at $10 (navy). Not only is the $10 resistance clearly visible from February thru April, but $10 has also been a strong area of support since the beginning of May as well. So, the $10 price level is key to this stock. All tests of LCC’s $10 support have gained at least a 10-20% run up.
The Tale of the Tape: LCC presents two very simple trading opportunities based on its key level of $10. A short position could be entered on a break below $10 with a stop above that level. A long play could be made on any pullbacks to $10 with a stop set below the level.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT