This week one of the talking heads on television proclaimed, “Short the Airline Stocks”. I like it when they do this because; a) the stocks usually sell-off rather quickly and, b) the talking heads on television are usually wrong.
This presents an opportunity for those looking to open a position in the targeted sector or add to an existing portfolio.
I already own stock in ExpressJet Holdings (XJT). This is the old Continental Express and the company did a reverse split last year so there is only 15.6 million shares outstanding. I love low float stocks. The company has also been buying back shares this year. Charts courtesy of Stockcharts.com which is one of the best charting services.
Right now the price is sitting on the 50-day moving average. It has a long way to fall to reach the 200-day moving average so this is definitely a concern.It has been trading pretty much in sync with the Dow recently. If I were opening a new position I would make sure the $3.00 area holds for a couple of days and wait for the Dow to pop back over 10K. Nah, if it were me I would probably buy now but waiting would be the smart thing to do. Here’s the Dow:
For me XJT will be a long term holding. A sell or merger is likely in this company’s future and it certainly looks to be worth more than $5 bucks per share.
The next stock up is my favorite out of the two. I’ll post it tomorrow and try to give a little more technical info. As you will see, I like beaten down stocks that trade under $5 the most.
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