The Best Way to Trade the Airline Sector’s Strength

Mark’s Watchlist

Ford hasn’t been on my list for a while now, but it’s back today. JPM is a recurring name… but I’ve got a special opportunity to show you how to trade it.

And WMT is heading for some potential downfall – so be careful…

1. Ford Motor Co. (NYSE:F)

F had a rough summer. This thing dropped around 20% from early June to late September.

But now, it’s finally starting to show some strength.

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I’m waiting for F to break over 15 before it actually makes a run higher, toward its 52-week high near $16.50. And when it does break that point, I’d consider diving into this car company again.

2. JPMorgan Chase & Co. (NYSE:JPM)

JPM isn’t the only financial I’m watching as we head into the first week of earnings – it’s just the first bank to actually report.

Over the course of next week, we’ll see a slew of earnings hitting the market:

I’ve got a close eye on these reports – and how to trade them. But I’m not the only one…

Kenny Glick, VWAP expert, trading genius, and my Money Morning LIVE colleague, is hosting a live trading session on Wednesday at 9:30AM ET, just in time to show you how to use the VWAP to trade JPM’s report.

Reserve your spot at this event – just click here!

3. Walmart Inc. (NYSE:WMT)

WMT got oversold last week, but it’s up nicely right now:

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I wouldn’t suggest getting into it just yet though. I think retailers like WMT will have a strong rest of the week, gaining maybe another 1% tomorrow.

But next week could be rough – not just for WMT, but for the whole market. I’d wait for the dip before cashing in.

For next week’s market forecast, check out today’s VIX light…

VIX Traffic Light

The market is getting a nice lift today, the S&P up over 1% as I type. And the VIX, in turn, is down about 8%.

But that doesn’t mean my VIX light is red just yet.

The end of next week, regular monthly options will expire on Friday the 15th. Typically, this leads to some negative movement as everyone sells off their positions.

Now, I wouldn’t necessarily go all in on puts. Sometimes, when everyone is expecting something to happen, the opposite comes true. So, we’re all expecting the market to dip ahead of Friday’s expiration – it could go up.

I won’t jump in until I actually see that negative movement to the downside. But if the market sells off on Monday or Tuesday, don’t assume it’s just a blip – the red market could continue all week.

 

Today’s Impact Money Trade

We’re seeing two big-money trades in the airline ETF today, US Global Jets ETF (NYSEARCA:JETS).

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We’re looking at a diagonal buyer here in the first trade, with a 25,000 contract trade. We’re also looking at 10,000 of the December $30 calls – both trades betting on a jump higher in JETS.

I don’t disagree here. The JETS ETF is stronger than the New York Jets, that’s for sure…

But I wouldn’t go long on JETS to play airlines. I’d go about this in a different way.

Instead of cashing in on the whole basket, I’d rather trade direct airlines.

Here are my top three…

1. Southwest Airlines Co. (NYSE:LUV), up over 21% year-to-date

 

2. Delta Air Lines Inc. (NYSE:DAL), up almost 15% year-to-date

3. JetBlue Airways Corp. (Nasdaq:JBLU), up more than 12% year-to-date

 

Tomorrow, I’m answering the best questions that I’ve received from the Profit Takeover Ask Me Anything form.

If you want to send a question directly to my inbox – and potentially see an answer in tomorrow’s Profit Takeover send – then click here now!

Until then…

Mark Sebastian

 

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