AAL Soars With EPA Set to Allow Coronavirus-Killing Disinfectant

The equity is down over 55% year-to-date, however

Digital Content Manager
Aug 24, 2020 at 10:55 AM
facebook twitter linkedin


The shares of American Airlines Group Inc (NASDAQ: AAL) are up 6.2% at $12.91 this morning, as the U.S. Environmental Protection Agency (EPA) is set to announce an emergency exemption to the state of Texas, which will permit the major airline to use a new surface-coating substance on flights originating from this region that kills COVID-19 upon contact for up to seven days. This exemption aims to provide additional protection in public spaces, which could help increase consumer confidence in resuming air travel.

On the charts, the equity has been extremely volatile for that past few months. And while shares attempted a rally above the $22.80 mark in early June, the breakout was capped by the 200-day moving average. Now emerging as a floor, the 120-day moving average has kept a limit on the security's recent pullback, aiding AAL's hefty 55.8% year-to-date deficit. 

Analysts remain pessimistic toward the airline stock, with six of the 13 in question calling it a "sell" or worse, and four carrying a tepid "hold." Meanwhile, the stock's consensus 12-month price target of $11.56 is a 8.2% discount to current levels.

Shorts continue to pile on, too. Short interest is up 10.5% in the last two reporting periods, and the 158.82 million shares sold short make up a hefty 35.7% of AAL's available float. This equates to 1.6 times the stock's average daily trading volume.

The tide could be shifting for American Airlines stock, however. AAL's options pits have been exploding with bullish activity of late, as evidenced by the 1,091,938 calls that were exchanged in the past 50 days, as opposed to a mere 556,862 in the same time period.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners