Tackle Today: Did Reopening Stocks Just Bottom?
August 6, 2021
≈ I dare say they did. ≈
Coach Tyler here. There’s a group of economically sensitive stocks that we refer to as “the reopening trade” or “reopening stocks.” They include industries like airlines, cruise lines, and casinos. If you haven’t been paying attention, allow me to bring you up to speed on what’s been happening.
Going into Thursday’s session, WYNN was 37% off the highs, DAL was 28% off the highs, and CCL was 34% off the highs. These losses have transpired, mind you, while the S&P 500 has been notching new records.
But yesterday, everything changed. My watchlist leaderboard was littered with reopening stocks. SEAS up 17%. PENN up 9%, WYNN up 8%, AAL and CCL up 7%, MGM and LYFT up 6%. So on and so forth. The fact that many of these companies were up so much after earnings adds to the bullishness.
As a result of the rally, many formed higher pivot lows. Others built double bottom patterns. There’s no denying this is “a” low. Whether or not it becomes “the” low for the downtrend remains to be seen. Consider me optimistic, though. I love the start, and if I were a bear in these names, then I’d be hightailing it back to my den after Thursday’s performance.
Chart of the Day
Carnival Corporation (CCL)
Carnival (CCL) is an excellent example of the revival attempt occurring in reopening stocks. Thursday’s rip created a higher pivot low which confirms demand is increasing. This is also the first break of the 20-day moving average since the stock peaked in June. The next bullish signal is a break above resistance near $23.50.
Video of the day
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