LCC Watch

US Airways Group Inc. (LCC) is showing bear signals as it flirts with a decline below the 20-day simple moving average. The company on Wednesday reported disappointing traffic figures.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
LCC $9.62

The report and the market response came after quarterly earnings prompted 10 days of bullish exuberance. But how fickle these traders be! A 20.6% price rise on earnings, and then a mere 0.7 percentage point drop in seats filled compared to capacity, and traders deal out a 14.5% decline.

Is there a reward for past accomplishments? Not in the markets.

Person's Proprietary Signal and the parabolic sar moved to bear phase on Wednesday, and they were followed today by the macd. The fast stochastic plunged below the 20-line.

Airlines, like retailers, live and die by a few metrics that allow simple comparisons. So they are, more than many other industries, driven by results that in turn are driven by consumers' willingness to spend money on discretionary activities, like flying off to the beach or the in-laws. Or corporate confidence: Teleconference, or take the junket?

For LCC, the question is whether the economy will continue to recover, along with consumer confidence, or are we moving into a double dip recession. LCC's price has avoided that question since early June with a sideways move. Longer term, the stock continues to recover from its recession low of $1.45 set in July 2008.

On the Person's chart, the price has moved below the lower weekly pivot, illustrating that this is a serious decline, not just trader whimsy.

Person's Table

	pps	pps open	upper pivot	lower pivot
LCC $10.77		$9.65 aug4	$11.61 +20.7%	$10.39 +8.0%

Although slipping below the 20-day sma, the stock continues to trade well above the 200-day exponential moving average..

Reversal Levels

• $11.40, +18.5%
• $9.84, +2.3% (20-day sma)
• $9.62 <== You are here.
• $8.05, -16.3%
• $7.96, -17.3% (200-day ema)

LCC could go as a sideways play with a very wide range, or perhaps a downside play with the 200-day ema as a target. I don't particularly like this stock, frankly, for the same reason I don't like pharmaceuticals: Too many surprises.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.