Short Airlines Now?

[Supreona]

Should we short Airlines now, with the high fuel costs or am I late to the party?

[netwrangler]

Should we short Airlines now, with the high fuel costs or am I late to the party?
The sector is down something like 25% YTD. Many of the larger airlines were down more than 10% today. So it's possible that our 'short' flight has already taken off.

Experience with Finance last year, however, taught me not to underestimate how far down an ailing sector can fall.
In other words, we may be able to take a later flight.

I want to do some DD on this today.
If shorting is a good idea for the next quarter or two, I figure it will still be a good deal tomorrow. ;)

[Supreona]

The sector is down something like 25% YTD. Many of the larger airlines were down more than 10% today. So it's possible that our 'short' flight has already taken off.

Experience with Finance last year, however, taught me not to underestimate how far down an ailing sector can fall.
In other words, we may be able to take a later flight.

I want to do some DD on this today.
If shorting is a good idea for the next quarter or two, I figure it will still be a good deal tomorrow. ;)

What would you be looking at specifically net? There are a lot of small airlines out there too, doesn't have to be the big boys.

You got any wind plays that you're doing DD on??

[pedrom727]

You missed the party, at least in the short-term. While airline stocks certainly have potential to drop further I'm pretty sure there will be a significant short squeeze soon. You have to short them in anticipation of bad news, not after it. Put in shorts now and I can all but guarantee you will lose money. And no, I'm not bullish at all on airlines in any way, I don't think anyone is.

[netwrangler]

What would you be looking at specifically net? There are a lot of small airlines out there too, doesn't have to be the big boys.

You got any wind plays that you're doing DD on??
My first goal would be to find companies that are cash short - either hurting on income or loaded up with debt or both.

I figure life is going to be tough for airlines for some time to come. The summer travel season is supposed to be their time to shine. But with oil prices rising and the airlines working on a 60-90 day lag between ticket pricing and actual expenses, this summer could be brutal.

My concern as a short trader, however, is that an 'obvious' short candidate could merge with another airline and thus erase the profit from a short position.

Oh, well, that's something to watch for.
Overall, the airlines are in deep yogurt.

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And, no, I don't have any wind plays on the short list.
Always looking for some, however...