Interesting Technical Analysis finding for SOUTHWEST AIRLINES CO (NYSE:LUV)

Our stock screener has identified SOUTHWEST AIRLINES CO (NYSE:LUV) as a potential breakout candidate. This technical breakout setup pattern occurs when the stock consolidates after a strong uptrend. While the actual breakout is uncertain, it may be worth keeping an eye on NYSE:LUV.

What is the technical picture of NYSE:LUV telling us.

Every day, ChartMill assigns a Technical Rating to each stock, providing a score ranging from 0 to 10. This rating is determined by evaluating various technical indicators and properties.

Taking everything into account, LUV scores 8 out of 10 in our technical rating. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, LUV is showing a nice and steady performance.

• The long term trend is positive and the short term trend is neutral. The long term trend may just continue or reversal may be around the corner!
• In the last month LUV has a been trading in the 28.58 - 32.20 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• When comparing the yearly performance of all stocks, we notice that LUV is one of the better performing stocks in the market, outperforming 80% of all stocks. However, this overall performance is mostly based on the strong move around 10 months ago.
• LUV is part of the Passenger Airlines industry. There are 24 other stocks in this industry, LUV did better than 56% of them.
• LUV is currently trading in the middle of its 52 week range. The S&P500 Index however is currently trading near new highs, so LUV is lagging the market.

Check the latest full technical report of LUV for a complete technical analysis.

How do we evaluate the setup for NYSE:LUV?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NYSE:LUV exhibits a 9 setup rating, indicating its consolidation status in recent days and weeks.

Besides having an excellent technical rating, LUV also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 30.39. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 29.43, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

How can NYSE:LUV be traded?

To potentially initiate a trade, it is common practice to wait for the stock to break out of the consolidation zone. This breakout signifies a potential upward movement, and traders may enter the stock at that point. Conversely, if the stock falls back below the consolidation zone, it may be sold at a loss.

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents technical observations generated by automated analysis but does not guarantee any trading outcomes. Always trade responsibly and make independent judgments.

More breakout setups can be found in our Breakout screener.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.