Airlines Starting to Drop

When you think Travel and leisure, sunny destinations and faraway locations come to mind. In the past I have discussed the ETF $PEJ, which is the travel and leisure ETF. Up until the end of May this ETF has been performing quite strong, thanks to a resilient and strong Airline sector. Well that is until June 8th.

Names like Southwest ($LUV), United ($UAL), and JetBlue ($JBLU), are down today anywhere from 2-4 percent in one trading session. While we profess to buy on weakness, this might be a little too weak.

Yesterday $PEJ closed at $36 and I would like it to hold $35.5 before I would look at adding any beaten down airline stock. Using the Stock Forecast Tool for the trend prediction for the next 10 days, we have the ETF grinding between $36 and $37. I will not be adding these names to my portfolio until I see a break above $37.

One other note, watch tech ($QQQ), especially the large-cap tech names like: Facebook ($FB), Google ($GOOGL), and Apple ($AAPL). These could be setting up for some upside extension if the market firms up at these levels.

Have a great trading day.