Potential Inflection Point for Air Canada

Good morning all, I hope your weekend was spent well and are ready for another trading week.

Air Canada is my favourite stock pick of the year, I was long at $21 a couple of months back and I have seen a solid 26% gain. However, I feel as though we are in for a trend reversal. I still like where I own the stock and will be buying on pullbacks. I can see this chart going one or two ways.

First, AC will have a pullback towards its 50day moving average and continue its up-trend going forward. The stochastic RSI is showing underbought symbols, however, what puzzles me is the potential convergence/divergence point in the MACD indicator, its been bouncing along giving weak buy signals and that is making me question the strength of this up-trend.

I would either hedge Air Canada with a few medium-term put options, enter short, or buy the dip. This one can truly go either way.

Stay sharp out there.