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  • Writer's pictureJerremy Alexander Newsome

Southwest Airlines: Stock analysis

Southwest Airlines: Stock Analysis 1/30/2015

Hello readers! If you are reading this inflight, I hope your flight is currently pleasant and enjoyable! I have been an avid customer, fan and 'flightee' of Southwest for many years. My first experience with flying Southwest was from Nashville, TN to San Jose California for a convention. I am 6'4”, 220 lbs (in case you're wondering, yes, I am terrible at sports, especially basketball), however, leg room is a hot commodity for me when I fly. I was so surprised at the bountiful inches between my knees and the seat in front of me. The staff, flight, and entire experience was a solid one, full of heart! I've had many flights since then. 

Along with flying on occasion, I am a professional stock trader. Now, before you get woozy in anticipation of a sales pitch, you won't find one here.  I am just a guy with a computer who loves trading LUV stock and any stock for that matter. 

Below is a weekly chart of LUV and it's one I bring to you with a hint of caution. There's a term in the stock market world. It's called a 'bubble' and below is an image of what that would look like.

As recently as 2012, LUV was trading at $8.00 a share. That means the stock has increased almost 600% in 2 years! This is not a random penny stock, this is Southwest Airlines. And above is the exact image of what I refer as 'parabolic bullishness'. Stocks do not go straight up for very long. This is a weekly chart and that's important to keep in mind. What's also important to remember is one of the most important pieces of advice in all of investing: Buy low, sell high. If you buy LUV stock currently, you most certainly are buying high, hoping to sell higher, which will be tough to do.

I expect soon that the stock has a correction, or pull back, in the next few months that would give this plan stock a nice landing and therefore a rest. Maybe a purchase after the pull back around $30 would provide a good opportunity to do just that, buy low and sell high. Enjoy the rest of your flight, thanks for reading and until next time, love life, live life and trade it!

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