While investors remain focused on opportunities within the growth sectors, I’m continuing to find actionable ideas in more value-oriented areas of the market. The Industrial Select Sector SPDR (XLI) has actually outperformed the Nasdaq 100 ETF (Invesco QQQ Trust) by about 2% so far in 2024, and my weekly scan for new swing highs yielded a number of new ideas in the sector. While some of those charts appear a bit overextended as we near the end of the first quarter, the airlines group features charts that may be earlier on in their bullish trends. We’ll break down the chart of the US Global Jets ETF (JETS) and show how Alaska Air Group (ALK) could build on strong momentum into Q2. After peaking around $22.50 in July 2023, JETS sold off to an eventual retest of the September 2022 low around $15. November of last year saw a dramatic turnaround for airlines, with JETS quickly regaining over half the losses by mid-December. In 2024, we’ve observed a pattern of higher lows in January and March, with the most recent low around $19.50 lining up well with previous resistance from December and January. The momentum has been impressive off the October low, with the RSI (Relative Strength Index) remaining above 40 on those pullbacks in January and March. When an ETF is in a bullish phase, the RSI often becomes overbought on upswings and usually stays above the 40 level on pullbacks. So based on price momentum and simple analysis of price action, JETS appears to be in a solid uptrend as we wrap Q1. Alaska Air shares just getting started Alaska Air Group has recently broken above a key resistance level and could represent a compelling option for investors searching for stocks earlier on in their uptrends. Off its October 2023 low around $31, ALK quickly moved higher to test the 38.2% Fibonacci retracement level, which often serves as an initial resistance point. Alaska remained below that retracement level as well as a declining 200-day moving average until this week. Now we’re seeing ALK power above $42 with an initial upside target at the 61.8% retracement level around $47. The momentum characteristics are consistent with bullish phases, with Alaska becoming overbought this week after a quick rise. While overbought conditions could indicate a short-term pullback in the coming weeks, we’re inclined to assume this uptrend could be just getting started. —David Keller, CMT marketmisbehavior.com DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
