American Airlines Group Inc (NASDAQ: AAL)

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo.

Take a look at the 1-year chart of American (NASDAQ: AAL) below with the added notations:

1-year chart of American (NASDAQ: AAL)

AAL has been rallying higher for the past week or so, eventually making its way back up to a key level around $36 (blue). The stock found support in that area a couple of times back in July and August, and also hit resistance there earlier this month. The $36 mark should be pivotal in dictating AAL’s next move.

The Tale of the Tape: AAL has a key level at $36. A trader could enter a long position on a break above that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a rally back up to $36.

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!

Good luck!
Christian Tharp, CMT