UAL Stock Surge Could Have Bears Hitting the Exits

The airline stock closed at an all-time high last Friday

by Research Dept.

Published on Nov 27, 2018 at 11:24 AM

The shares of United Continental (NYSE:UAL) have continued to push higher, up almost 59% year-over-year and notching an all-time closing high on Friday. Prior to this, a pullback was neatly contained near the site of UAL's September high and the 20-day moving average. The outperforming airline name looks poised to keep rolling, especially with the company set to present at a Credit Suisse conference this week.

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Meanwhile, the stock could benefit if short sellers begin to throw in the towel. This is especially true since short interest jumped 39% in the last reporting period alone, putting nearly 6% of the total float in the hands of these bears. Going by average daily trading volumes, it would take almost four sessions to cover these positions.

There's also potential for bullish attention from the analyst community. As of now, eight brokerage firms still have "hold" ratings on UAL, meaning upgrades could come through and help lift the shares.

Now appears to be an attractive time to purchase premium on near-term UAL options, too, with its Schaeffer's Volatility Index (SVI) coming in at 29% -- in the low 21st annual percentile.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this UAL commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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