EarningsBeats Digest

Published: Fri, 03/18/22

EarningsBeats.com Digest for March 18, 2022

Travel Industry Is Trying To Negotiate Resistance

Consumer discretionary stocks have struggled significantly during 2022 and it's been one of the worst industry groups in one of the weakest sectors. Many stocks within the travel industry have bounced this week, but unfortunately, this strength is likely the result of options expiration. Because many stocks have been beaten down, there's a significant number of in-the-money put options and the entire group is likely heading higher this week because of it. Here's the current chart:

It's difficult to paint a rosy picture here. In early March, the DJUSTT broke beneath a key support range from 725-740 that had been holding for months. After falling another 14-15%, we've seen a nice rally, but again, it's options expiration week. Is this rally pure manipulation? The rally has not yet been able to clear overhead price resistance in the 725-740 range. I'd be very careful with this group until a more definitive signal of an uptrend has been established.

Happy Trading!

Tom Bowley
Chief Market Strategist

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