SOUTHWEST AIRLINES CO is showing promising signs of setting up 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.

In-Depth Technical Analysis of NYSE:LUV

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 8 out of 10 to LUV. Although LUV is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• The long and short term trends are both positive. This is looking good!
• LUV is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so LUV is lagging the market slightly.
• LUV is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• When compared to the yearly performance of all other stocks, LUV outperforms 68% of them, which is more or less in line with the market.
• LUV is an average performer in the Passenger Airlines industry, it outperforms 40% of 23 stocks in the same industry.

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

Why is NYSE:LUV a setup?

Alongside the Technical Rating, ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for NYSE:LUV is 9:

LUV has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 32.49. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 32.19, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for LUV in the last couple of days, which is a good sign. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading setups like NYSE:LUV

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.

Of course, there are many ways to trade or not trade NYSE:LUV and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Our Breakout screener lists more breakout setups and is updated daily.

Disclaimer

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.