Chart of the Week: Airline Stocks on Takeoff

Cutting right to the chase on things, airline stocks are cheap.

That's what I started telling premium subscribers last week, and recommended 2 stocks that are now up nearly 20% on a combination of both fundamental and technical factors.

So if you think the omicron variant will turn out to be a pussycat instead of a voracious tiger - as some experts now suspect - you can't ask for a better time to get involved with these stocks in my opinion.

From what's playing out on the charts, it looks like lots of investors and traders are getting an early start doing just that.

The chart for US Global Jets ETF (JETS) - which comprises 50 or so airline stocks and some other key industry players - offers us a good example.

#1 - The recent omicron-inspired panic plunged JETS to its lowest price in over a year, and on huge trading volume.

The volume surge tells us there was huge amounts of fear out there as investors dumped airline stocks whatever the cost.

#2 - The drop in price attracted bargain hunters and others who suspected omicron might not be as threatening as first thought - the surge in volume (the green bars) on those trading days shows us that there was huge amounts of interest in owning the ETF and associated carrier stocks at lower prices.

#3 - The subsequent rise in JETS's price in the last few days takes the stock back up nearly to the $22 level, which served as an important support level for the ETF through the second half of this year - and now serves as a resistance level as airline stocks attempt to rebound.

Investing and trading stocks is always about probabilities, since we can't take anything for granted. There are no certainties about stock prices, as JP Morgan supposedly once said that "they will fluctuate."

As you might recall, I wrote a goodBUYs article in September about how favorable the background was for airline stocks back in September - yet the stocks continued to stairstep lower.

But if JETS and its airline stock components continue to gather buyers, the ETF would be setting itself for a breakout above the $22 resistance level, and then be in a good position to move substantially higher in 2022.

I'll save it for later discussion here. But as I told goodBUYreport premium subscribers last week, airline stocks are trading at fundamental rock-bottom prices levels if we look beyond the immediate pandemic earnings lull (along with higher fuel and labor costs) to a point next year, where Americans are back to flying in pre-pandemic numbers again.

Best of goodBUYs,

Jeff Yastine