During Friday's Lightning Round segment of Mad Money one caller asked Jim Cramer about JetBlue Airways (JBLU) . "No, you want Southwest Airlines (LUV) that's the best operator," commented Cramer.
Let's check out the charts of Southwest.
In the daily bar chart of LUV, below, we can see that the shares have been flying higher the past 12 months. Prices are trading above the rising 50-day moving average line. The 200-day moving average line has a positive slope.
The On-Balance-Volume (OBV) line has been positive since early August and confirms the price gains. The Moving Average Convergence Divergence (MACD) oscillator looks poised for an upside crossover and buy signal.
In the weekly Japanese candlestick chart of LUV, below, we can see that prices have rallied from their March 2020 low. In recent weeks we can see both upper shadows and lower shadows -- a sideways trading range could develop. Prices are trading above the rising 40-week moving average line.
The weekly OBV line is positive and the MACD oscillator too.
In this daily Point and Figure chart of LUV, below, we can see that the software is projecting a possible downside price target in the $55 area. A rally to $64.78 would be an upside breakout and turn the chart bullish.
In this weekly Point and Figure chart of LUV, below, we can see a tentative upside price target of $74.
Bottom-line strategy: The charts of LUV show that there might be a decline to the $55 area but that would not break the longer-term uptrend and the weekly Point and Figure chart shows a $74 price target. Traders could go long LUV in the upper $50's while risking to $54. The $74 area is our price target.
