Recovery stock? Only temporary
Be careful with AAL.
While everyone is hunting for "recovery stocks" this may only be temporary in the case of American Airlines.
AAL has been in a down trending channel since 2018, when trade tensions were at peak and oil prices were rising. Things aren't very different today with a potential strong recovery of oil prices. AAL usually gets hit hardest because they burn their cash fastest compared to their competitors. While management seems serious about trying to turn things around, not sure this stock is going to see "all time highs" any time soon.
There is an upside of 26% - 40% here, but if I were in AAL I'd play with tight stop loss limits because that downside to the bottom of the channel is not far from the covid crash and nearly 50% down.
Good luck.
While everyone is hunting for "recovery stocks" this may only be temporary in the case of American Airlines.
AAL has been in a down trending channel since 2018, when trade tensions were at peak and oil prices were rising. Things aren't very different today with a potential strong recovery of oil prices. AAL usually gets hit hardest because they burn their cash fastest compared to their competitors. While management seems serious about trying to turn things around, not sure this stock is going to see "all time highs" any time soon.
There is an upside of 26% - 40% here, but if I were in AAL I'd play with tight stop loss limits because that downside to the bottom of the channel is not far from the covid crash and nearly 50% down.
Good luck.
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