The Nosedive Trade, American Airlines (NASDAQ:AAL)
Shares of American Airlines Group Inc. (NASDAQ:AAL) have come under pressure the last two weeks even as the price of oil has dropped. This drop in oil should help American Airlines Group Inc. (NASDAQ:AAL) as it cuts their fuel prices, helping their bottom line. The stock has now created a "Head and Shoulders" top pattern on the daily chart. If this chart pattern should trigger, it could easily send the stock down to the $25 level. Let's look at how you should trade this stock...
Trade The Pattern:
The trade is simple, the first close below the neckline on a daily chart time frame basis is when you go short AAL. If it then closes back above the line, consider the pattern voided and you stop out for a small loss. This is a low risk, high reward setup and you should certainly take advantage of it. Like I said, abide by the levels, they will guide you to trade this pattern for either a very nice profit, or a fast exit for a small loss.
Trade The Pattern:
The trade is simple, the first close below the neckline on a daily chart time frame basis is when you go short AAL. If it then closes back above the line, consider the pattern voided and you stop out for a small loss. This is a low risk, high reward setup and you should certainly take advantage of it. Like I said, abide by the levels, they will guide you to trade this pattern for either a very nice profit, or a fast exit for a small loss.
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