AAL has run into a historically bearish trendline on the charts
The shares of
American Airlines Group Inc (NASDAQ:AAL) are struggling for direction today, last seen down 0.2% at $14.65 despite today's
broader market rally. The equity already carries a 27.9% year-over-year deficit, and is now eyeing its third-straight daily drop. What's more, AAL could continue careening towards its Oct. 3, two-year low of $11.65, after running into a historically bearish trendline.
Digging deeper,
American Airlines stock currently sits within one standard deviation of its 160-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's most recent study, AAL has seen six similar signals in the last three years, and was lower one month later 83% of the time, averaging an 11.3% dip. A move of similar magnitude would place the security back below the $13.20 level, which contained two of its latest pullbacks.
Analysts are still on the fence, indicating a round of downgrades and/or price-target cuts could push American Airlines stock lower. Of the 13 analysts in question, 10 still call AAL a tepid "hold."
Now looks like an ideal time to jump in on the bearish bandwagon. This is per the stock's Schaeffer's Volatility Index (SVI) of 48%, which sits in the extremely low 9th percentile of its 12-month range, suggesting options traders are pricing in low volatility expectations for AAL right now.
What's more, AAL's Schaeffer's Volatility Scorecard (SVS) comes in at 19 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.