The airline industry and sector could be poised for another move upwards as oil prices stay low. Several airline company stocks have pared well recently with positive price action.

A particular airline though, one that has always been a Trendy Stock Charts member favorite, seems poised and setting up for an excellent trading opportunity. That airline is Spirit Airlines (SAVE). My previous article on SAVE was “12/6/2016 – Spirit Airlines (SAVE)“.

In that article, I had mentioned that I was anticipating a pullback of SAVE’s share price back towards the $50 area, $52 to be a little more specific. Let’s get a progress update on the previous article and examine some indicators to watch for and confirm the probable success of the trade.

Save With Spirit Airlines (SAVE)

This first chart for Spirit Airlines is a 2 year weekly candlestick chart that has 2 different Fibonacci Extension Tools overlaid on the chart. One is black and the other is blue colored. You can learn more about the Fibonacci Extension Tools here.

Using Fibonacci Extension Tools on a Weekly Candlestick Chart for Spirit Airlines (SAVE) to Calculate Some Upside Price Target Areas

Any pullback on light selling volume towards the $[s2If !current_user_can(access_s2member_level1)]…….

If you would like to continue reading this article and see the trade set-up I see taking place for Spirit Airlines (SAVE) and the risk reward the trade will offer, you must first login. That includes what sort of price activity you should be watching for in the gray shaded box on the chart.

If you are not a Trendy Stock Charts member, consider subscribing today! I have a couple of different subscription plans to chose from.[/s2If][s2If current_user_can(access_s2member_level1)]50 area could present itself as a point to make a scale-in entry to go long shares of Spirit Airlines (SAVE).

A favorable earnings report for SAVE and it could start a run-up in its share price towards its Golden Ratio of its current uptrend. That Golden Ratio area is the blue 161.8% Target Line from the Fibonacci Extension Tool. The 161.8% Target Line sits at the $70.85 mark. With oil prices, in my opinion, to stay lower for longer, airlines should be able to benefit. Especially the low cost leader of the group.

One thing is for certain, a favorable trade set-up at this point for SAVE involves its share price not breaking below the 50% blue Target Line during any pullback. If it can stay above the 50% blue Target Line, the chances for a breakout up to the 161.8% Target Line are increased.

SAVE – Moving Averages

This is a 1 year daily candlestick chart to look at the moving averages for SAVE and how they relate to a Fibonacci Retracement Tool that I also overlaid on the chart. A break below the 50 Day moving average is required for SAVE to reach the lower $50 price target that I mentioned above.

Analyzing SAVE’s Chart From a Moving Average & Fibonacci Perspective

Any pullback that finds support between the 38.2% and 50% Retracement Lines could be a decent opportunity to go long shares as an initial scale-in purchase. Those shares could be used for general trading or as part of building a position in the stock.

Wait for any potential pullback to the 200 Day moving average. That is where another scale-in purchase could be made as part of building out a position in the stock. The 200 Day moving average currently sits around the 61.8% Retracement Line.

This would also be the first pullback to the 200 Day moving average since the recent development of its Golden Cross pattern. This usually makes for a great, lower risk trading opportunity.

Spirit Airlines (SAVE) – Summary

With millenniums looking for that “experience”, the airline industry and sector could be well poised to benefit over the longer-term if they can do their best to control inventory (seats). Millennial have become the largest percentage of the population according to recent statistics. If the airlines can keep from hurting themselves with over-capacity, they can reap the benefits.

Short-term, watch the pullback and look for support most likely around the 50% Retracement Line from the Fibonacci Retracement Tool, if support is found there, look to go long.

If a pullback develops and breaks below the 50% Retracement Line, look for support at the 200 Day moving average. That is another location where a scale-in purchase can be made.

As always, look for other reversal signs like a reversal candlestick, a volume spike, or even a favorable change in the MACD Histogram to confirm the other areas I’ve already identified above. IF that happens, that can help to add confidence to the trade and allow you to profit accordingly.

Ask for any updates on the trade in the Idea Chamber…..and as mentioned in an update earlier today, watch out for any upcoming inauguration weakness……that could be the buying opportunity……good luck trading….