Market Overview

No 'Luv' For Southwest Airlines As It Extends Losing Streak To Fourth Day

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Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Southwest Airlines Co (NYSE: LUV) shares are trading sharply lower by $0.75 at $41.50 in Monday's session.

With no specific news out on the issue, it just may be the sharp rally in crude that is spooking investing in the airlines sector.

After shedding nearly $1.00 on Wednesday ($44.30 to $43.45) and another $0.59 on Thursday ($43.45 to $42,86), the issue was off by $1.23 at its low ($41.02) in Monday's session. Since making the low, it is attempting to clear the $41.50 level.

The sharp decline in the entire sector may be attributed to a Deutsche Bank downgrade of Delta Air Lines, Inc. (NYSE: DAL) on April 1. The firm downgraded the issue from Buy to Hold and and lowered its price target from $60 to $50.

Since the downgrade, Delta has fallen from its March 31 close ($44.96) to $41.45.

Southwest Airlines has now relinquished nearly all of its hard fought gains that saw the issue climb from its November low ($40.23) to it all-time high in January at $51.06.

Related Link: Is The Drop In Airlines A Buying Opportunity?

Unfortunately, for shareholders of the issue, most of the decline has taken place since March 20, when it ended the session at $47.42.

It should be noted the declines from the last two trading sessions were much higher than its 20-day average of 6.3 million, as 19.3 million and 15.6 million changed hands in the two previous sessions.

It is on track for another above average volume day, as it has already traded 10.3 shares with three hours to go in the trading day.

Posted-In: Pre-market outlookTechnicals Intraday Update Movers Trading Ideas

 

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