Airlines - Is the Reopening Trade Over

I monitor the news lows list across various durations daily. This week, it's been flashing a heads-up warning on the reopening travel trade. Airlines, cruise lines, and hotels are dominating the list.

While most travel-related stocks are weak, the airlines stood out as the group has now traded below its 10-day moving average for 21 consecutive days.

Let's conduct a study to identify other instances in history when airlines have been consistently weak on a short-term basis, as the moving average trend suggests. I will also add a condition to identify the first instance after a 252-day high to assess similar cases to the current one.

NEW LOWS LIST FROM MONDAY 6/28

HOW THE SIGNALS PERFORMED

The results suggest the airlines could see a mean reversion bounce based on the 1-month timeframe. If a bounce materializes, one would want to avoid the group as the intermediate to long-term results look unfavorable.