Show some love for Southwest Airlines for the long haul

• Posted by Greg Harmon
• on November 18th, 2015

Southwest Airlines ($LUV) had a strong run higher from a base at $8 from the end of 2012. Bags fly free is apparently winning some business. But as the calendar turned into 2015 it started a pullback. The stock retraced 38.2% of the move up and then started back higher. Last week it had made it back to resistance again, and started a small pullback.

With the move back up this makes for a trigger in a Cup and handle pattern. The target is shown at 61.25 above. But it gets better. Along the journey Southwest printed a Golden Cross, with the 50 day SMA crossing up through the 200 day SMA. There is also a AB=CD pattern that commits to a target of 70on the trigger over 46.50.

Momentum is supportive with the RSI in the bullish zone, having reset and turning back higher. The MACD has pulled back a bit and a turn higher would also confirm the upside. Perhaps it is time to pack your portfolio and let LUV fly in it for the longer term.

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