Southwest Airlines (LUV) stock jumped more than 2% higher on Monday as the company announced its intention to return to profitability.
Analyst estimates for the company’s upcoming earnings report on October 24 indicate that the airline will post losses near $0.21 per share as revenue continues to decline.
Last quarter’s revenue reflected year-over-year growth of just 5.2%, one of the lowest growth quarters in the last four years.\
Oils prices and wage pressures have been applying pressure to all of the airlines, making it difficult to post profitability despite a record-breaking summer travel season.
Management’s announcement today suggested that Southwest’s employees need to brace for difficult decisions as part of the company’s planning, a clear signal that layoffs are likely.
Southwest’s stock recently shifted into a short-term bullish outlook as its 50-day moving average started to ascend on August 30. That trending 50-day now suggests that the stock should close higher two out of each three days.
In addition, the stock moved above its bullish 200-day moving average last week, another sign that the short- to long-term outlook is bullish from a technical perspective.
The stock is facing round-numbered resistance at $30 That price squashed August’s strong rally just a few weeks ago and served as the stock’s high in June.
A move above that psychological price level will draw additional buyers in to Southwest shares as the airline stock would then be shifting into a long-term bull market trend.
Tesla (TSLA) shares benefitted from a bullish report from Barclays on Monday helping the stock rally almost 5%.
Barclay’s report suggests that Tesla is setting to report better-than-expected deliveries for the current quarter despite waning demand in China.
Sales of Tesla’s in China has dropped as consumers respond to weaker economic conditions and uncertainties surrounding the country’s housing market.
Domestically, sales of Tesla’s should gain some ground over the next two quarters after the Fed’s recent cut to interest rates.
Last week, the stock finished on strong trading as investors are buying the stock ahead of the October 10 robotaxi event. Today’s report is adding more speculative buyers to the stock.
Tesla shares moved into a long-term bull market trend just three months ago after share prices hit relative lows of $150.
Shorter-term technical measures like the stock’s 50-day and 200-day suggest that the stock’s current bullish momentum is likely to continue.
Shares of Tesla maintain a long-term bullish outlook with a price target of $350.
Costco (COST) shares rallied on Monday as the stock prepares for a bullish breakout to new all-time highs.
Shares of the retail giant have been trading in an extremely tight range for the last three weeks as volume has started to pick up on the stock ahead of this week’s earnings report on Thursday.
Last quarter, Costco delivered better-than-expected earnings and revenue results that resulted in a short-term selloff in shares.
Earlier this month, Costco announced that the company would be increasing their annual membership fees by 8.3%. Those increases went into effect on September 1, meaning that Thursday’s results will not reflect the increase’s effect on the company’s top line.
Investors should expect that Costco’s new CFO will comment on the forecast for that revenue increase in the report and conference call.
Management is also likely to discuss a stock split for Costco as the share price approaches $1,000 as it would be one of only 16 equities in the United States trading above $1,000.
A move above $925 will strike new all-time highs for the stock and represent a break above the stock’s top Bollinger Band.
Both “triggers” should result in increased buying of the stock causing a fast and aggressive move higher over the short-term.
Costco shares maintain a bullish outlook with a target price of $1,200.
