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Faith Over Caution Wins For Airline Stocks As Investors Look Forward

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Updated: 3 Jan 2022
  • Pre-emptive buyers take hold of slipping airline stocks
  • Flight cancellations are not enough to weigh on bullish faith
  • Delta, United, AAL all up around 4% on Monday

 

Throughout pandemic trading, pre-emptive speculation has been a key feature of price action. As fears rise, sellers take hold of sectors that will be under fire. Similarly, as society adjusts, or fears start to subside, investors take advantage of lower prices and soon find themselves buying up stock that has been victim to extreme selling – waiting for the lucrative rebound that is, essentially, inevitable. 

Travel companies were hit incredibly hard by lockdowns and international travel restrictions. Airlines across the board plummeted, with no clear light to mark the end of such unprecedented times. Omicron epitomizes pandemic trading patterns, simpy on a slightly more refined scale. When the variant news hit the markets, short sellers knew exactly where to go – causing dips in major US airlines following staff shortages and flight cancellations. 

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Today’s news displays a narrative that favors faith over precaution. Flights from Delta, United Airlines, Jetblue, and more all came to a near-on standstill as the variant made its way through staff and passengers alike. However, despite the cancellations, investor optimism appeared to outweigh the bearish caution that we are used to seeing today – with United, American, and Delta all trading around 4% up on Monday. 

Investors are no longer cowering beneath negative news updates, but are looking forward to the months to come, demonstrating that faith in a future recovery is more than enough to support stocks that would otherwise be struggling. 

 

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