March 13-17th Trade Ideas

$AAL – American Airlines
Recent News
The US Department of Transportation’s Secretary Pete Buttigieg has urged Congress to pass a law that cancels the extra fees charged by airlines for children to sit with parents. The provision would require airlines to seat young children adjacent to at least one accompanying adult at no additional cost, subject to certain conditions such as the family being booked in the same class of service. The transportation department launched a tracker last week that shows the status of airlines with regard to fee-free family seating. Currently, three of the 10 tracked airlines provide passengers with the option to seat children with at least one parent. The announcement has caused a dip in the stock prices of major airlines such as Southwest Airlines, Delta Air Lines, United Airlines and American Airlines Group.

Trade Ideas

• AAL recently dropped from its 6-month high and consolidated until recently. It has since dropped 12% since last Thursday, 3/9. 
• With the recent drop, current support level sits ~$14, it is yet to be seen how far this stock will go to bottom. Next support after this sits around $12/share. 
•  In the near term we see price stability within the $13.25-$14 range, which could provide much trading interest. In the longer term, one would be looking at the $11.50-$14 range, which harkens back to October 2022 lows.

Shares Outstanding: 233.78M Share Float: 215.3M

$BAC – Bank of America
Recent News
Investors are worried about weak spots in banks despite the Federal Reserve’s attempts to boost confidence. Banks with sizable uninsured deposits, like First Republic Bank, saw significant drops in their shares. However, larger banks like Citigroup and Bank of America, with over a trillion dollars in uninsured deposits, were less affected. Investors are favoring larger banks with more resources, diverse business units, and stricter regulation, which may accelerate the shift of deposits to the biggest banks. Banks with heavy exposure to commercial real estate lending may also be at risk due to the pandemic’s impact on occupancy rates. While the Fed’s actions may prevent destabilizing deposit outflows, investors are looking for more than survival from banks. Additionally, banks that need high levels of liquidity may struggle to grow their longer-term lending, and a potential cut in rates by the Fed could lead to less net interest income.

Trade Ideas

• BAC is likely to see further moves downward, but within the week, each drop in price on an intra-day level opens up opportunities for the next trading day. With such a drop in pricing, one may see a short-term price increase or bounce on the day in which traders may take advantage of the upside.
• Short traders have the obvious advantage here and may benefit from shorting or likewise through optionable contracts with buying puts on the negative news surrounding the SVB collapse.
• BAC has fallen through its last support level at around $30/share and has settled as of 3/13 at 28.51/share. There is further room for BAC to fall as its next support appears around the $26.50 area. It is somewhat likely that BAC will continue its fall and may continue past this support zone, making it another resistance level. From this point traders may find new support levels at the lows of COVID at around $22/share. 
• As a trader, one should focus on the current range a stock is trading, focus for this week would be in the new $30 resistance level and the $26.50 support level.
• It is reasonable for traders to take caution but see the opportunity within BAC and other like-sectored stocks. It is recommended to keep in mind that most reactions to major news are overreactions.

Shares Outstanding: 8.09B Share Float: 7.99B

$CRWD – CrowdSrike
Recent News
CrowdStrike Holdings, a cybersecurity company, reported better-than-expected earnings and revenue for the fourth quarter of 2022, and also gave strong revenue guidance for the current quarter ending in April. The company’s earnings rose 57% to 47 cents per share and revenue jumped 48% to $637.4 million, beating Wall Street’s estimates. CrowdStrike’s revenue growth guidance for the current quarter is also above Wall Street’s expectations. The company’s key financial metric, annual recurring revenue (ARR), increased 48% to $2.56 billion. 

Trade Ideas

• CRWD is in the volatile technology sector, making it suitable for intra-day trading. Traders can expect moves of 5-7% intraday.
• CRWD has recently dropped and confirmed through a bounce off of the $117 support area, this is after it had peaked towards the $140 resistance level earlier last week.
• CRWD appears to have set up at the bottom of a consolidatory movement and may rise towards the $140 resistance level.
• CRWD may drop to its 200 day SMA on a 4-hour chart, which we think is a fair market price of around $112.
• A set-up is occurring in which the price action may squeeze through the 50 day SMA and 200 day SMA, leading to a more volatile upwards trajectory in price.
• There is a longer-term set-up for the next few months if one is patient, with a recent high of $205.73/share within the last 6 months.
• A reasonable price target for a 3-6 month swing trade could lie between the $160 to $180 range, bringing a 32% gain on investment from the current closing price of $121 as of 3/13.

Shares Outstanding: 235.05M Share Float: 199.28M

$F – Ford Motor Co.
Recent News
Ford has been in the news recently due to various developments. The company is recalling 18 electric Ford Lightning pickup trucks due to a battery-cell defect. However, Ford aims to resume production with fixes in place next week. In China, Ford is offering a discount on its most sought-after electric SUV Mustang Mach-E in an attempt to create a new era for the company in the booming Chinese EV market. Meanwhile, Ford’s Q4 earnings and 2023 forecast failed to meet investor expectations, contributing to a slide that extended through February. Production delays and negative sentiment from Wall Street also impacted the company’s performance. However, investors may have an opportunity to invest in Ford at a more attractive price, especially since the company’s adjusted free cash flow in 2022 exceeded expectations.

Trade Ideas

• Ford’s stock price has stayed between approximately $11.00 and $14.75 for more than four months. This is a great stock for traders to make both long and short trades within those price levels.
• Ford is a great long term stock with a dividend of 4.96%. 
• Ford has recently squeezed downwards between the 50 day SMA and the 200 day SMA on the 4hr chart. This pushed pricing towards its lower support level around $11.50/share, a trader may take note as if pricing falls through a short trade may be the best option.
• If the automotive industry keeps declining, Ford’s stock may reach ~$9.00, which we believe is a good buying opportunity.
• Likewise, if the price action bounces off of the support level, it will need to squeeze through the 50 and 200 days SMAs in which case a strong movement towards its next resistance level at around $15/share could take place.

Shares Outstanding: 4.00B Share Float: 3.88B

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