United Airlines Technical Signals Show Clear Skies Ahead Of Earnings

As United Airlines (UAL) prepares to report its fourth-quarter earnings on January 22, investors are eagerly awaiting the results, and for good reason. The airline has been on a tear, with its stock price soaring over 183% in the past year, fueled by robust air travel demand, strong execution, and upbeat operational results. But what do the technical signals suggest about the airline's prospects? Let's dive in.



First and foremost, United Airlines' stock price has been trading above its five, 20, and 50-day exponential moving averages, indicating a sustained bullish trend. This suggests that there is strong buying pressure behind the stock, with investors confident in the airline's prospects. Additionally, the eight-day SMA at $106.38, 20-day SMA at $101.57, and 50-day SMA at $97.15 all confirm a bullish setup, reinforcing momentum to the upside.



Moreover, the RSI (relative strength index) at 67.00 indicates strong buying interest but remains below overbought territory, suggesting that the stock is not yet overvalued. This means that there is still room for the stock to appreciate, as investors continue to pile in. The MACD (moving average convergence/divergence) indicator at 3.52 further signals bullish momentum, with the MACD line crossing above the signal line, indicating a potential trend change to the upside.



Options traders are also expecting notable movement in United Airlines' stock price immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. The current expectation is a 10.8% move in either direction, indicating significant potential for price action around the earnings release. This high level of interest and anticipation among investors aligns with the positive analyst sentiment and broader market trends for the airline industry.



Wall Street is highly bullish on United Airlines stock, with a Strong Buy consensus rating based on 17 unanimous Buys. The average UAL stock price target of $128.06 implies 19.3% upside potential, reflecting analysts' confidence in the airline's prospects. Several analysts, such as Andrew Didora (Bank of America) and Duane Pfennigwerth (Evercore), have increased their price targets for UAL stock, citing strong growth in premium, corporate, and transatlantic travel sectors.



In conclusion, the technical signals for United Airlines (UAL) ahead of its earnings report are overwhelmingly bullish. The airline's stock price has been trading above its moving averages, with strong buying interest and momentum behind it. Options traders are expecting significant price action around the earnings release, and analysts are highly bullish on the stock, with a Strong Buy consensus rating and an average price target implying 19.3% upside potential. As United Airlines reports its fourth-quarter earnings, investors should be prepared for a potential breakout, as the airline continues to soar on strong fundamentals and positive market trends.