AAL
As seen in the attached weekly chart below, AAL has reached a lifetime support level triple bottom. In addition to this, the daily chart is showing some very steep bullish divergence in RSI and in the Klinger Oscillator. I have had much success playing these particular types of RSI divergences, ones where there is a steep drop into oversold conditions, a slight bounce, followed by a drop below the prior low. If this price action occurs along with a steep RSI divergence print, I have found a high likelihood of a move upward to follow. However, being right at this critical support level adds the most important aspect; risk/reward. Stop loss set at 24.98 allows for less than 2% loss before being able to cut the position and move on elsewhere. With possible gains at a minimum of 15%, the reward outweighs the risk by a ratio of 9:1. Not bad odds to me. If playing short term, I like Sept. 6th C28 options, currently available for no more than .13 per contract. If a longer term buyer, this would be a great spot to initiate a position with stop losses set at 24.98. Happy hunting and GLTA!!
