Stocks have kicked off the second half of 2017 with a bang, as oil prices head toward an eighth straight win. And while biotechs have historically been one of the best-performing sectors this month, several airline names are on the list of best stocks to own in the July-to-December stretch, including Alaska Air Group, Inc. (NYSE:ALK) and Delta Air Lines, Inc. (NYSE:DAL) — both of which are trading near key technical levels.
ALK One of the Best Stocks to Own in 2H
ALK shares are trading up 0.4% at $90.11, bringing their year-over-year return to 53.5%. More recently, the stock took a bounce off its 200-day moving average in May, and could now establish a foothold in the $88-$90 region — home to its year-to-date breakeven mark and a 23.6% Fibonacci retracement of its mid-2016 to early 2017 rally.
Historical tailwinds could help keep Alaska Air stock’s momentum going through year’s end, too. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, ALK has averaged a second-half gain of 37% in the last 10 years, and has been positive 90% of the time.
A continued round of short covering could also help boost the outperforming airline stock. Although short interest on Alaska Air shares is down 20% since the start of the year, there are still 7.01 million ALK shares sold short — or nearly six sessions’ worth of pent-up buying demand, at the stock’s average pace of trading.
DAL Options are Cheap Right Now
Delta Air Lines has put in an impressive performance on the charts, surging nearly 50% over the last 52 weeks. Earlier, the shares hit a record high of $54.71, and were last seen up 1.2% at $54.40. And while any near-term pullbacks could be contained near $54 — home to DAL’s 10% year-to-date breakeven mark — below this is possible support at $52, which coincides with the stock’s former highs and a 23.6% retracement of its current surge from April.
Similar to its sector peer, DAL shares have historically been strong in the final six months of the year. In the past decade, Delta Air Lines stock has averaged a gain of 30.9%, with an 80% win rate.
Now appears to be an affordable time to bet on DAL’s near-term trajectory with options, too. The stock’s Schaeffer’s Volatility Index (SVI) of 25% ranks in the 10th annual percentile, meaning low volatility expectations are being priced into short-term Delta Air Lines options — a potential boon to premium buyers.
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