Promising Signs: SOUTHWEST AIRLINES CO Setting the Stage for a Breakout.

Our stock screener has detected a potential breakout setup on SOUTHWEST AIRLINES CO (NYSE:LUV). This breakout pattern is observed when a stock consolidates following a strong upward movement. It's important to note that this pattern is based on technical analysis, and the actual breakout outcome is uncertain. However, it might 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.

Overall LUV gets a technical rating of 8 out of 10. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, LUV is only an average performer.

• The long and short term trends are both positive. This is looking good!
• In the last month LUV has a been trading in the 28.58 - 31.90 range, which is quite wide. It is currently trading near the high of this range.
• Looking at the yearly performance, LUV did better than 79% of all other 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 60% 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.

For an up to date full technical analysis you can check the technical report of LUV

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 8 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. There is a resistance zone just above the current price starting at 31.27. Right above this resistance zone may be a good entry point.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

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.

Every day, new breakout setups can be found on ChartMill in our Breakout screener.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.