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Two Ways to Play: New Airliners Forecast Is Uplifting

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Strengthen your portfolio in good times and bad.

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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

Economics

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

Click here for the full trading radar.

Thirsty Thursdays! Send me your best happy hour stories. Good luck!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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