Crude oil prices and shorting airline stocks

Posted on April 25, 2006 , filed under Stocks | Print This Post

I wrote yesterday about shorting AMR, AMR Corporation and CAL, Continental Airlines, Inc. AMR has a 52 week high of $29.14 and closed yesterday at $24.12. CAL has a 52 week high of $28.90 and closed yesterday at $25.95. I believe CAL is moving up faster than AMR under speculation that CAL is gaining long term market share from bankrupt DALRQ.PK, Delta Air Lines, Inc. and NWACQ.PK, Northwest Airlines Corporation. No one knows if the market share gains will be long term or short lived for CAL if Delta and Northwest successfully emerge from bankruptcy. My target is still Thursday, April 27th, 2006 to short shares of AMR and CAL. I’m looking this week for crude oil prices to stay above $72.50 and for CAL to stay at current prices. I will also consider shorting shares of AMR if the stock rises above $26. I use this Bloomberg page to track the price of crude oil. The page is not a static image, it dynamically updates with a 15 minute delay in real-time prices.

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2 Comments »

Comment by J.J.

2006-04-25 09:15:18

On a different subject, I took your advice and purchased EBAY when it dipped below $35 yesterday. I was wondering whether you did the same, and what your outlook on the stock is.

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Comment by Andy

2006-04-25 11:14:04

I’m bullish on eBay long-term. I didn’t purchase shares of EBAY. I’m going to concentrate on selling some of my positons to free up capital. I’m looking for a jump up in UMC, TSM and FLWS as they report earnings this week. I will take a position later if EBAY remains below $35.

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