Wednesday, August 20, 2008

Oil and the Airlines: Inverse Proportion

So I was interested in some airline companies (AAI and CAL respectively). So this is a lesson I learned the hard way. As oil found support at around 110/barrel, the airlines found resistance and could not overcome that barrier. An analyst said that under 110 the airlines could be profitable, but that looks like a pipe dream so airline stocks are now continuing to go lower and lower as oil begins to rise back up.

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