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Southwest Airlines to continue its downward spiral

Authored by ZanderVanDerMerwe
25.01.2022
Stock Squawk
0
2 min

Friday’s Movers:

  • Netflix Inc (NFLX) was down 21.79% as new subscriber numbers were weaker than expected resulting in most of the Wall Street analysts cutting their rating.
  • Coinbase Global Inc (COIN) was down 13.38% as Russia’s central bank proposed a ban on cryptocurrencies.
  • Peloton Interactive Inc (PTON) was up 11.73% as its collapse starts to talk of a possible acquisition from Apple, Nike and Amazon
  • Nikola Corporation (NKLA) was down 8.64% as investors are shifting from high-multiple stocks to value stocks following concerns of supply issues of semiconductors.

Earnings Due:

StockSymbolAnnouncement dateRelease TimeEPS Estimate
International Business Machines CorporationIBM24/1/2022Estimated$2.51
Microsoft CorporationMSFT25/1/2022Post-Market$2.08
General Electric CompanyGE25/1/2022Estimated$0.44
Johnson & JohnsonJNJ25/1/2022Pre-Market$2.35
American Express CompanyAXP25/1/2022Pre-Market$1.75

Stocks to watch:

Southwest Airlines (LUV)

Airline stocks are on the decline prior to earnings being released and the 5G sentiment that came into play last week. American Airlines and Delta Airlines have been selling off at a dramatic rate as it was announced that the 5G towers near airports have interference on the older aeroplane instruments.

With FOMC due this week, as an expectation of a possible rise in interest rates, there might very well be more downside on the way as the tightening of the consumer pockets might lead to flight cancellations.

Earnings are due for release on the 27th of January, with earnings expected to be slightly positive in comparison to last quarter’s negative earnings. Given a miss on EPS, there should be a more substantial downside on the way.

Technically the chart is lining up for a good move to the downside as it held below the 200-day moving average and broke through the 20 and 50 day moving averages in the latter part of last week. 

We should see a continuation of this downward momentum carry through to $37.24.

Authored by ZanderVanDerMerwe
25.01.2022
Stock Squawk
0
2 min
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