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United Rises After Earnings Beat - Market Cycles Point To Higher Near-Term Highs

|Includes: JETS, United Continental Holdings, Inc (UAL)

United Airlines (NASDAQ:UAL) traded 8% higher on Wednesday morning, after reporting earnings that beat Wall Street expectations.

The company reported earnings per share of $3.23 and total revenue of $10.8 billion, above analyst estimates of $3.05 and $10.7 billion. They also raised full-year guidance to $7.25-8.75 per share from $7.00-8.50. The market liked that as the average analyst estimate for guidance of $7.73 is in the lower half of the new estimated range.

The airline sector as a whole also benefited from the news, with the US Global Jets ETF (NYSEARCA:JETS) trading 3% higher. With fuel prices rising, major rivals had previously cut their guidance, but United’s optimism may be encouraging some investors to think again. And, falling energy prices are likely to help earnings moving forward.

In analyzing the market cycles for UAL, we can see that the stock recently completed its previous market cycle and is now in the rising phase of its current cycle. We have been bullish on UAL with the stock bottoming and then making higher cycle lows and higher highs. Our intermediate target is $83.

United Airlines (UAL) Stock Chart with Weekly Bars

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.