My last post on $AAL was here. That was last fall when it was of course not yet clear just how much longer we were going to rally. As things have deteriorated, so has this stock, and let’s look at the long-term picture. It does not look very good.
From the GFC low, there are seven swings up and not just five. There is a good impulse wave in there (the pink count) but as it has swings before it (the yellow a-b on the left), that makes everything from the GFC low a correction only.
From the 2018 high, we seem to have two swings in already, and have entered a third (yellow c on the bottom right). The problem is, given the magnitude of the price range, there are only two fibs available to us (the rest are in negative price territory). And the 38.2% fib is a minor fib. It is highly likely that this will move to a major fib, such as the only other fib available to us, the 50% fib, which is effectively at zero.
This is the only airline which has more liabilities than it does assets, and if we have a strong recession, they will probably have to reorganize (at best) and common shares might be destroyed (and later reissued), which could explain this (more information regarding their dire fundamentals may be found in this article).