Swing Trade Idea (LUV) – October 18, 2022
Our bearish trade for Tuesday, October 18th is Southwest Airlines Co. (LUV). LUV is part of the Industrial Sector, which has performed at -2.94% over the last month, with LUV underperforming relative to its sector at 5-5.79% over the same period.
LUV had a short rally into the 21-Day EMA from where strength is declining. Also, the 1M trend is neutral and the 6M trend is bearish and it has a relative strength of 3 (out of 10), which provides a good risk/reward bearish entry.
As a close, if LUV were to trade above $34 for multiple days, this would invalidate our analysis and we would consider cutting losses on the trade. We want to consider cutting losses on this options trade if the value of the vertical spread moves above $2.18.
