In his first "Executive Decision" segment of Mad Money Thursday night, Jim Cramer sat down with Oscar Munoz, CEO of United Airlines Holdings Inc. (UAL) , a stock that's up 9% for the year and 32% over the past three years.
Munoz started off by saying there's a large gap between what economists are worried about and what the actual facts are on the ground. He said both the U.S. economy and the global economy remain strong and customers are still flying and spending. United continues investing heavily into technology, he said, because that's what customers expect from the companies they deal with. Technology not only helps passengers, it also helps United's employees care for passengers better.
When asked about Boeing's (BA) 737 MAX, Munoz said they are still waiting for regulators to tell them the plane is safe to fly, but once that occurs, United will take extra care making sure customers feel comfortable on the plane. For concerned flyers, Munoz said United will do whatever it takes, including free rebooking, if necessary.
Let's check out the charts of UAL as part of our pre-flight routine.
In the daily bar chart of UAL, below, we can see that prices are working on establishing an uptrend. After equal lows in January, March and May UAL is making higher lows in August and October. A higher high was made in July and November has yet to make a fresh higher high. UAL is trading now above the rising 50-day simple moving average line and above the rising 200-day simple moving average line.
The real bullish indicator on this daily chart is the On-Balance-Volume (OBV) line, which has been rising the past year and made a new high for the move up this month. A rising OBV line tells us with simple math that buyers of UAL have been more aggressive all year and I think that is pretty bullish.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line but recently crossed to the downside for a take profits sell signal.
In the weekly bar chart of UAL, below, we can see that the price of UAL has been in a long sideways trading range with buyers showing up in the $80-$75 area and sellers in the $95-$100 area. Prices are above the rising 40-week moving average line and the weekly OBV line has moved up and down with the price action and it is not far from making a new high.
The weekly MACD oscillator has been above the zero line for several months and is positioned to move higher.
In this first Point and Figure chart of UAL, below, we used daily price data and the chart shows a potential nearby price target in the $97-$98 area. This could be an important upside breakout so let's see what a weekly close-only chart looks like (second chart below).
In this second Point and Figure chart of UAL, below, we used weekly price data and here a longer-term price target of $124 is being projected.
Bottom-line strategy: I do not know what the fundamental story would be to send UAL shares to $124 but that is what the charts are suggesting Friday. Traders could go long here and risk a close below $87. Add on strength above $97.