One of the most beloved stocks on Wall Street just surprised investors.
American Airlines, the S&P 500 share with the highest sales ratings and lower performance, recorded a lower loss than expected in the last quarter. Shares fluctuated volatile on Thursday, up more than 30% at one time. His brief interest caught the attention of Reddit traders who targeted troubled names such as GameStop and AMC.
Non-love stocks, such as American Airlines, could grow even higher this year, said Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors.
“We are looking for a recovery. This recovery may take some time, but I think most investors are really focused on this recovery, and so investors are starting to look for opportunities to put their money into less-loved stocks that could benefit from a recovery in a a wave-raising scenario that lifts all boats, “Sanchez told CNBC’s Trading Nation on Thursday.
American Airlines has come under pressure in the past year, as the coronavirus pandemic has hampered domestic and international travel. The stock rose 119% from its May low, although it is still 41% lower than its peak in February.
“If last year you had to be pretentious and be very specific about where you wanted your exposure, next year you could actually see the recovery helping large sectors and there is something very cheap like in American Airlines or in the discretionary sector of consumers, such as a Bed Bath & Beyond … could benefit from a big boost for the entire sector, “Sanchez said.
Bed, Bath & Beyond is also a very short stock with above average sales ratings: its short interest rate of 63% also attracted Reddit traders and triggered a short spill. Shares rose 89% this year as retail flows pushed short traders to cover their positions.
Katie Stockton, founder of Fairlead Strategies, agrees that American Airlines growth has been driven by earnings and involvement in retail. She sees that this breakup continues and is not the only company with a large number of sales ratings that she supports.
“Another example of a beloved action on Wall Street is Western Union … and that comes in gains from the same relatively surviving status,” Stockton said in the same interview. “It also has a bit of price side action, a range-related configuration, which would go nicely for a pretty much breaking resistance under current levels. So I think that was the kind of configuration that was favored during this season of earnings. “
Western Union, whose revenue ratio is expected on February 9, has delayed a return to the markets – it has returned 32% from the April low, but remains 19% below the February high. The stock has six street sales ratings.
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