Alaska Air Group is ready for diving

Exchange: NYSE

Sector: Services

Industry: Regional Airlines

Entry strategy

Price: $58.2

Stop-loss: $68.8

Take profit: $13.5

Investment horizon: until the end of 2019

Company details

Alaska Air Group Inc. (NYSE: ALK) — American aviation holding. It was formed in 1985 on the basis of the airline Alaska Airlines. In 1986, the holding acquired Jet America Airlines and Horizon Air. The company’s headquarters is located in Sitek, a suburb of Seattle (Washington).

    The holding includes two certified commercial air carriers:

  • mainline airline Alaska Airlines,
  • regional airline Horizon Air.

The Alaska Air fleet consists of Boeing, Airbus, Bombardier and Embraer aircrafts. The company has no Boeing 737-MAX8 and 737-MAX9 airplanes, which were banned in March by a number of countries.

Key indicators of the company’s shares. Source: Yahoo Finance

Financial performance of the company

In 2018, Alaska Air cost of sales sharply increased and financial results for all types of profits significantly reduced.

Basis for the short position — technical analysis

The company’s shares grew rapidly from mid-2008 to March 2017. The price has increased over this period by more than 40 times.

By now, on the price chart of this stock, the formation of the main reversal pattern — the «Head and shoulders» — has completed. We believe that this uptrend ended for a long time and in the near future the market will accelerate the decline, correcting an impressive ten-year growth towards $30, and then $13.5 per share.

Technical analysis of the Alaska Air stock ($ALK). Daily data. Source: TradingView