IB Net Payout Yields Model

Buy Airlines On Oil Induced Weakness

More evidence continues to show that the strikes on Saudi oil facilities actually came from Iranian missles, not Yemen drones. Not even sure, if it matters, because the whole world knows that Iran was involved. 

The bigger question is how to handle trading on Monday. Oil will initially rally, but the market has plenty of supply including strategic reserves from the U.S. and Saudi will likely get their facilities back up and running in no time. The US military along with S.A. and possibly Kuwait will make sure this attack doesn't occur again anytime soon. 
The stocks likely to take an initial hit and provide a buying opportunity are the airlines. The airlines use substantial fuel so any higher oil prices will impact their costs. The market continues overlooking that the airlines now have the ability to raise fares along with higher costs and control capacity, if any pull back in demand was to occur.
American Airlines Group (AAL)Delta Air Lines (DAL), Southwest Airlines (LUV) and United Airlines (UAL) are already very cheap stocks. 

Use any further weakness to load up on these airline stocks. Most of the airlines will be buying shares alongside the market. 
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Disclosure: Long AAL, UAL. Please review the disclaimer page for more details.  


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