I still think airlines are due to come down, but I will be more enthusiastic to short them on a market down day. This may be the time to try an options play. DAL 10-strike puts are currently 1.90 and NWA 10-strike puts are 1.35. Most of the airlines are a 2:1 risk/reward short when the $DJI is red, the exception being XJT, a good chance on red (the stock) no matter what the market conditions and a decent day ranger. UTSI went red on red $DJI 81% in last 100 days.
**UPDATE
LGDI, which has the highest probability of going red on a market up day (read this post; download co-relation calculator here), was indeed the best drop. That's why it was listed first folks. Airlines are stubborn little ones so I keep stalking them... but I shouldn't try to predict ahead of time on these kind I suppose.
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2 comments:
Yep, I am going to watch XJT too. Looks like its ready to pop! And I like how you have already started using the co-relation calculator! Great!
RJ
Johnny, you into jazz fusion/smooth jazz ? Noticed you played jazz.
"Q"
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