The price action and slowing momentum figures on Alaska Air (ALK) suggest we can see a leveling off of prices in the near term.
In this daily bar chart of ALK, above, we can see prices are testing the rising 50-day moving average line. A close below this short-term moving average line might precipitate some selling and a decline to around $90. Note that the generally positive On-Balance-Volume (OBV) line has been flat or neutral in the past three months. In the lower panel is the 12-day momentum study (today's price minus the price 12 days ago), which shows a bearish divergence. Prices have made higher highs from November through February and the momentum indicator has made lower highs, telling us the rate of acceleration has slowed. A slowing momentum pattern can often foreshadow a correction.
In this three-year weekly chart of ALK, above, we can see prices are above -- maybe too far above -- the rising 40-week moving average line. The weekly OBV line turned up in June last year, confirming and supporting the price gains to date. The Moving Average Convergence Divergence (MACD), while above the zero line, which is bullish, has narrowed toward a liquidate-longs sell signal. This is a take-profits signal and not an outright sell.
Bottom line: With momentum slowing and the lack of strong buying from the daily OBV line, we get a message that ALK can pull back or decline in the short to intermediate term. I would anticipate that ALK can revisit the $90-$85 area in the weeks ahead. This anticipated weakness could be a buying opportunity, but we don't want to get a non-refundable ticket just yet.