Markets

5 High Flying Airline Stocks to Buy

It almost feels like the tide is changing. Just a few weeks ago this market looked abysmal. We were teetering on the brink, quickly approaching the abyss that would surely swallow this market. The Chinese stock market was crashing, the Fed was sitting idly by, and Carl Icahn was warning us all it was going to get way worse. And then…

It all turned around. Rather than heading for the exits, investors were looking for stocks to buy. Values presented themselves and we went rushing into stocks across the board. Breadth has been decidedly positive as the rising tide lifted all boats. Don't think that you can just blindly buy the market here though. There are still obvious pockets of strength to look to and areas of weakness to avoid.

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One industry that has been killing lately is the airlines. These high-flying stocks currently in the Top 9% of our Zacks Industry Rank. Lower fuel prices coupled with an increasingly adventurous consumer have boosted the bottom line. Efficiency and productivity improvements are providing the rest. Several of these stocks are taking off and pulling the rest of the market along with them. Nine stocks in this industry are currently Zacks Rank #1 (Strong Buy) stocks.

JetBlue Airways ( JBLU )

In my Trending Stocks video today I outlined the case for Jetblue shares. You can watch it below.

JetBlue Airways Corporation, or JetBlue, is New York's Hometown Airline™. In 2013 JetBlue carried over 30 million passengers with an average of 800 daily flights and served 82 destinations in the United States, the Caribbean and Latin America.JetBlue was incorporated in Delaware in August 1998, commenced service on February 11, 2000 and by the end of 2013 had grown to become the 5th largest passenger carrier in the U.S. based on revenue passenger miles.

Shares have been in an uptrend all year bouncing along the 50-day moving average several times. Recently, the Commodity Channel Index stretched to an oversold -100 level. A couple days of positive momentum has the CCI making a break toward the zero line. A crossover would be a buy signal on a stock approaching its 52-week high

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Alaska Air ( ALK )

Alaska Airlines, Inc., an Alaska corporation founded in 1932, is noted for its award-winning customer service. Alaska through its mainline jet service provides scheduled air service for over 16 million passengers annually. In addition to its service to destinations in Alaska and the West Coast, the airline flies to several cities in the Midwest, Texas and the East Coast, as well as the four major Hawaiian Islands. Alaska also provides service to British Columbia in Canada, and to nine destinations in Mexico. Its hubs are Anchorage, Seattle, Portland, and Los Angeles.

A big move from June to mid-August followed a consolidation period that lasted the first half of 2015. Over the last month, range has compressed and shares bounced between $77 and $82. With ALK still above the 50-day moving average, the underlying trend is still bullish here. The chart provides a good risk versus reward as a stop could be placed just shy of the September trading range.

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Virgin America ( VA )

Known for its mood-lit cabins, three beautifully designed classes of service and innovative fleetwide amenities - like touch-screen personal entertainment, WiFi and power outlets at every seat, Virgin America has built a loyal following of flyers and earned a host of awards since launching in 2007 - including being named both the "Best U.S. Airline" in Condé Nast Traveler's Readers' Choice Awards for the past seven consecutive years and "Best Domestic Airline" in Travel + Leisure's World's Best Awards for the past eight consecutive years.

Virgin America shares were beat up for most of the year but began to catch a bid this summer as the rest of the airline industry heated up. After bottoming out just below $27 in July, shares rallied to establish a new top end of the range at $36. Some volatility followed with shares retracing to support near $29 during the August selloff. Good news is the September high took out the top end of the August range. With an oversold commodity channel index here, perhaps it's time to buy VA again as the intermediate bullish trend line appears to remain intact.

Click "FOLLOW THE AUTHOR" above for free stock picks!!! And Twitter @bartosiastics

Volaris ( VLRS )

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. ("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier (ULCC), with point-to-point operations, serving Mexico and the United States. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since beginning operations in March 2006, Volaris has increased its routes from five to more than 140 and its fleet from four to 53 aircraft. Volaris offers more than 240 daily flight segments on routes that connect 39 cities in Mexico, 21 cities in the United States and 2 Central America with the youngest aircraft fleet in Mexico.

Shares of VLRS have been on a slow and steady rise this year as well. A few sideways consolidations shook out some of the weaker hands during May and June. Renewed buying following a great earnings report helped push shares on through to fresh 52-week highs. With the CCI about to cross above the zero line again, it looks like the bulls are back in charge.

Click "FOLLOW THE AUTHOR" above for free stock picks!!! And Twitter @bartosiastics

SkyWest ( SKYW )

SkyWest, Inc., through its subsidiaries, operates a regional airline in the United States. It provides scheduled passenger and air freight services with approximately 3,500 total daily departures to various destinations in the United States, Canada, Mexico, and the Caribbean. The company operates its flights as Delta Connection, United Express, US Airways Express, American Eagle, or Alaska under code-share arrangements. As of March 4, 2015, it operated a fleet of 693 aircraft. It also offers regional jet and turboprop service to airports; and ground handling services for other airlines throughout its system.

There is a risk that SKYW shares are beginning to rollover here.
A new high hasn't been hit since mid-August and shares are
sandwiched between that high and the August 24 low. Shares may have found support here at the 50-day but it's too
soon to tell, A CCI buy signal looks to be just around the corner
and may be what SKYW shares need to push higher through the 52-week
high.

There is a risk that SKYW shares are beginning to rollover here. A new high hasn't been hit since mid-August and shares are sandwiched between that high and the August 24 th low. Shares may have found support here at the 50-day but it's too soon to tell, A CCI buy signal looks to be just around the corner and may be what SKYW shares need to push higher through the 52-week high.

Bottom Line

The airlines stocks have been benefiting from lower fuel costs and an uptick in travelers. Some are adapting, increasing productivity and becoming more efficient every day. Take a look at these five stock ideas in order to take advantage of this trend.

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of "Trending Stocks"

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CONTROLADORA VL (VLRS): Free Stock Analysis Report

VIRGIN AMERICA (VA): Free Stock Analysis Report

SKYWEST INC (SKYW): Free Stock Analysis Report

JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report

ALASKA AIR GRP (ALK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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