American Airlines Group Inc (NASDAQ:AAL) shares gained momentum during Thursday’s premarket session. Investors are reacting to a mix of analyst optimism and historic merger speculation.
In the regular trading session, the stock gave up its gains.
UBS Raises Price Forecast
On Wednesday, UBS analyst Atul Maheswari maintained a Buy rating on American Airlines. Maheswari increased the price target from $14 to $16, according to Benzinga Pro.
This update provided a fresh catalyst for the carrier as broader markets showed strength. Nasdaq futures rose 0.02% early Thursday, while S&P 500 futures edged up 0.12%.
Merger Chatter Sparks Volatility
The stock prices increased on Tuesday following reports involving United Airlines Holdings Inc (NASDAQ:UAL).
CEO Scott Kirby reportedly discussed a potential merger with President Donald Trump in late February.
While the meeting initially focused on Dulles Airport, the UAL-AAL merger talk sparked significant investor excitement.
Despite the market enthusiasm, experts suggest a steep climb for any consolidation deal.
Antitrust lawyer Seth Bloom said the deal is unlikely to clear regulators because it could raise airlines’ pricing power and hurt consumers.
Technical Analysis
American Airlines is sitting in the middle of its 52-week range of $8.96 to $16.50. It’s trading 12.7% above its 20-day simple moving average (SMA) but 8.2% below its 100-day SMA.
The moving average backdrop is still a bit heavy: the 20-day SMA is below the 50-day SMA, and the death cross in March (50-day SMA below the 200-day SMA) keeps longer-term trend followers cautious.
Over the past 12 months, the stock has been up 29.19%.
- Key Resistance: $14.00
- Key Support: $10.50
AAL Price Action: American Airlines Group shares were down 0.62% at $12.09 at the time of publication on Thursday, according to Benzinga Pro data.
Image via Shutterstock
Recent Comments