Transportation Stocks Are Hit: Ford, GM, Southwest Airlines

Oil prices and interest rates: Concerns about these 2 key factors are leading investors to dump shares of transportation companies whose profitability depends on them.

It’s not that the price of oil has skyrocketed – it’s the enormous potential that this represents, given all the unresolved problems in the Middle East these days.

A “deal in principle” with the UAW should help automakers, but it may already be priced in, judging by the lack of enthusiasm for pricing.

Additionally, the Fed did not raise rates this week, but the Treasury market is telling: Bond investors are expecting even higher yields as long bonds now offer more than 5%, indicating that market participants believe higher rates could be coming. .

It’s not the kind of economic scenario that car buyers or air travelers would find very encouraging. Sensing this, Wall Street types are reconsidering their old purchases of transportation stocks.

Ford, General Motors
General manager
Southwest Airlines
LUV
: Price chart analysis.

THE Ford The daily price table is here:

The red dotted line represents the level at which the stock found previous support in mid-March. The fact that it is below this level and has now been closed for 2 days below is a bearish look. The Relative Strength Index (RSI, below the price chart) has reached an “oversold” level.

Note that the 50-day moving average (the blue line) has moved below the 200-day moving average, another negative for shareholders.

Ford’s weekly pricing chart is here:

From a high of $23 in early 2022 to $9.77 currently, a drop of 57%, a remarkable drop in a short time for such a well-known American brand. Ford is now below its 50- and 200-week moving averages.

THE General engines The daily price chart looks like this:

It fell below the May support level in early October, briefly attempted a rebound and is now trading steadily lower. Although the RSI suggests “oversold”, this is not confirmed by the 50-day and 200-day moving averages, both of which continue lower.

GM’s weekly price chart looks like this:

You can see the decline below the previous support level of $30 from June/July 2022, an indication of buyers abandoning. This is also evident in the downward trend of the 50-week moving average and the inability of the 200-week moving average to trend upward again.

Here is the daily price table for Southwest Airlines:

The stock peaked in July at just over $39 and is now at $22.51, a 4-month decline of 42%. In September, it fell below the $28 support level in May and continued to decline. The 50 and 200 day moving averages are trending lower. The RSI suggests “lots of oversold”.

Here is the weekly price chart for Southwest Airlines:

The red circle indicates where the 50-week moving average has crossed below the 200-week moving average. After a few rally attempts, the stock has continued to decline since then, with the Relative Strength Index eventually falling to an “oversold” level.

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