Two Ways to Play: New Airliners Forecast Is Uplifting

By Terry Woo  MAR 11, 2010 8:20 AM

Strengthen your portfolio in good times and bad.


Airliners Uplifting

What’s been behind the strength of airline stocks? According to the New York Times, the International Air Transport Association (IATA) slashed this year's forecast for industry losses by half due to a stronger-than-expected economic recovery in emerging markets.

The IATA was expecting losses for the industry to be around $5.6 billion for 2010 as recently as December. But passengers returned to flying, said Giovanni Bisignani, the IATA secretary general.

The association sees passenger traffic growth at 5.6% from its previous forecast of 4.5% and compared with a decline in 2009 of 2.9%. It also sees cargo traffic, which fell in 2009 by 11%, to jump by 12% this year versus its previous estimate of 7%.

From the Bull Pen: Consider FedEx (FDX), which is sitting right at its 200-period moving average ($88.14) on the weekly chart. A pullback to $83 may be a buying opportunity. A sell stop can be set below $80.

From the Bear Cave: Airliners have always had trouble making money. But what’s the number one rule in shorting? Never short new highs. If anything, for the airliner ETF (FAA), watch for a quick reversal below yesterday’s low, or looking farther out, a correction and a failed rally before entering a downside position.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei 0.96%, India 0.41%, Hang Seng 0.09%, Shanghai 0.08%, and Taiwan -0.38%.

Across the pond, we see the FTSE -0.22%, DAX 0.06%, CAC -0.38%

As of 8:05 AM EST, S&P Futures are trading -2.500 to 1138.500 Nasdaq futures are -3.750 to 1912.50.

A Look at Commodities

Over in commodities, crude oil is -0.03 to 82.07 while gold is -1.800 to 1106.30 this morning. Silver is -0.018 to 17.000 and copper +0.0050 to 3.3740.

The dollar Index is -0.1000 to 80.6450.

On the Radar


08:30 Initial Claims
08:30 Continuing Claims
08:30 Trade Balance $-40.6b

Click here for the full trading radar.

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No positions in stocks mentioned.

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