The US airline stocks have had a great year so far, are the stock returns sustainable at this rate?

From Delta Air Lines, Inc (DAL) to United Continental Holdings, Inc. (UAL) and even JetBlue Airways Corporation (JBLU), airline stocks are on a tear and don’t seem in any position to stop the rally.

Because the Guggenheim Airline ETF (NYSEMKT: FAA) closed back in March due to lack of trading volume, we must focus on the single stocks themselves to measure the temperature of the group.

While most airline stocks are having having a beauty of a year, it is Delta Air Lines, Inc (DAL), with its roughly 90% year to date stock market rally that is really catching my eye.

From a long-term point of view of the below chart looking back to 2007, we note that the stock had a choppy going, which however in some respects doesn’t look much different from the broader stock market itself.  After bottoming in early 2009, the stock rallied hard and again retraced much of those gains by August 2011.  In the August – October 2011 period however Delta Air Lines, Inc (DAL) managed to develop a significant higher low versus its 2009 lows, which ultimately paved the way for the stock’s steep rally that began in late 2012 and accelerated in early 2013.

Hindsight schmindsight, I know, but in order to appreciate where a stock currently sits we must understand where it came from.  From this long-term point of view, the 2013 rally is steep but not something that is quite yet flashing sell signals.

DAL multi year

On the year to date chart, the stock is well supported by its November 2012 up-trend and earlier this week, on Monday September 9th broke out of what could have been a bearish flag formation.  The net result is a stock that this week again powered to a new year to date high and as such continues to act well around its important technical levels.  Like so many healthy-acting stocks, Delta Air Lines, Inc (DAL) has rewarded trend followers well this year and thus isn’t a stock I feel like stepping in front of on the short side, although some profit taking along the way is a healthy strategy.  The trend is your friend here, until it ends.

DAL year to date

The stock of JetBlue Airways Corporation (JBLU) year to date has had a good performance too, yet this stock hasn’t made a higher high since April.  Lateral support for the stock is at the $6.00 mark and a push past $6.60 could accelerate the stock higher again, for an airline stock play that doesn’t have a slope as steep as the one of Delta Air Lines, Inc (DAL).

JBLU

 

 

 

 

 

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