American Airlines Group Inc. (NASDAQ:AAL) stock is trading higher on Thursday, capitalizing on sector-wide momentum after a landmark U.S.–Iran preliminary peace agreement reopened the critical Strait of Hormuz.
Lower Fuel Costs Drive Airline Relief Trade
Crude oil dropped below $75 per barrel on Thursday, reaching its lowest level since early March. The market decline followed the U.S. and Iran reaching an agreement to end a prolonged conflict that caused the largest supply disruption on record, according to Trading Economics. Because jet fuel is a significant variable expense for airlines, the drop in crude prices triggered a relief trade for fuel-sensitive travel equities.
Short Interest Declines Ahead of Extended Weekend
Short interest in American Airlines decreased during the last reporting period, falling from 84.58 million to 74.84 million shares. This reduction leaves 11.39% of the company’s publicly available shares held short. Based on the recent average daily volume of 82.13 million shares, it would take one day for short sellers to close out their positions.
Thursday marks the final trading session of the week, as U.S. markets will close on Friday in observance of Juneteenth National Independence Day.
Recent Wall Street actions include Jefferies maintaining a Hold rating on American Airlines on Tuesday and raising its price target to $15.
Upcoming Second-Quarter Earnings Data
American Airlines is scheduled to report its second-quarter earnings on July 23. Consensus analyst estimates forecast a loss per share of 2 cents on quarterly revenue of $16.62 billion.
In its previous first-quarter report on April 23, the airline reported a loss per share of 40 cents, beating analyst expectations of a 46-cent loss. First-quarter revenue reached $13.91 billion, exceeding the estimated $13.76 billion.
Critical Levels To Watch For AAL Stock
From a trend perspective, AAL is extended to the upside versus its key moving averages, trading about 10.9% above the 20-day SMA ($14.27) and roughly 20.6% above the 200-day SMA ($13.13).
The moving-average structure is mixed: the 20-day SMA is above the 50-day SMA (bullish in the near term), but the 50-day SMA remains below the 200-day SMA. Longer-term, the stock’s 12-month gain of 49.72% shows the bigger trend has been constructive even with that lingering longer-term crossover.
- Key Resistance: $16
- Key Support: $13
AAL Stock Price Activity: American Airlines Group shares were up 3.39% at $15.94 at the time of publication on Thursday. The stock is approaching its 52-week high of $16.50, according to Benzinga Pro data.
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