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A sudden volume spike in these 3 stocks could mean something big

Key Points

  • Volume breakouts are great places to find golden ideas for a trade or investment.
  • Today's scanners have picked up unusual activity in these three stocks, and the story backs itself up as to why big money flows to them.
  • Analysts agree, and targets aren't far from reality.
  • 5 stocks we like better than American Airlines Group

Being a successful investor takes a lot of discipline, which is genuinely one of the deepest endeavors anyone can take on. Assuming you are not the average investor (you are here, so it's a safe assumption), you understand that a story without numbers is a fairytale and numbers without a story are a spreadsheet.

That's why MarketBeat does the homework to bring you both sides. Using tools like sorting stocks by their volume of recent shares traded can lead you into a goldmine of ideas. But you have places to be and goals to crush, so here's the time-saver version of your potential next moves.

With the VIX returning to its lowest levels since 2019, it is more important than ever to make sure you find yourself in action (whatever is left of it), which is why looking at names like American Airlines NASDAQ: AAL, Tesla NASDAQ: TSLA, and Norwegian Cruise Line NYSE: NCLH can be a good use of your time.

Numbers with a story

Anyone can spot the volume breakouts, well, anyone who follows MarketBeat, that is. However, knowing how to read doesn't get you paid; it is knowing how to use the information that counts. 

When it comes to airline stocks, there are only two names that should grab your attention. American Airlines is one of them, but Southwest Airlines NYSE: LUV is another for a completely different reason.


Southwest Airlines made it into the Goldman Sachs NYSE: GS conviction list, and its financials are genuinely beautiful compared to other names in the space. However, they term it an investment and no big buying spree ever came because markets expect to make money in 3-5 years; they want to get paid now.

American Airlines may be riding the tailwind of a bigger trend out there; you see, money also poured into Norwegian Cruise Line; catch the travel and leisure drift? According to the latest employment reports, around 40 thousand new jobs went to the industry, so there's got to be something there.

Could it have anything to do with oil prices plummeting from $90 a barrel to below $70 in the past quarter? Lower oil prices mean that both cruises and airlines just saw their margins boost significantly, drawing in a new wave of investment dollars.

Shares of American Airlines have rallied by more than 40.0% since they announced their quarterly results in October, and analysts indicate it could go a heck of a lot higher than that. For Norwegian, price action has also been kind, boosting the stock by roughly 52.0% in the same period.

With an earnings growth expectation of 89.6% for the next twelve months, Norwegian analysts say that the stock could be cheap relative to these projections, and markets are investing in the idea.

Now, Tesla may be a bit trickier, but rest assured it will also make sense in just a bit.

Unrefusable offer

Remember the conflicts that took over media headlines? The ones coming from the United Auto Workers (UAW) union. Their resolution ended with a 30-40% salary increase across the board for American car manufacturers like Ford Motor NYSE: F and General Motors NYSE: GM

These cost increases will only drive the bottom-line earnings lower and make their shares less valuable in the eyes of the market. Now, because Tesla counts on a highly automated and robotized manufacturing process, profits and margins for his pocket of the automotive sector are safe.

This would justify the volume rising to the top of the averages lately, as markets are only waiting for everyone else to realize what analysts already know: Earnings are set to grow by 23.4% in the next twelve months, giving due credit to its operational advantage.

Ford analysts took a cold heart to their projections, seeing a decline in earnings. General Motors also came to face the bitter reality, as they only saw a 2.8% growth rate, far from its former glory.

Okay, now that this one is out of the way, you should wake up to the possibility of this being a hedge situation against oil, too. If oil lowers, American Airlines and Norwegian Cruise are set to boom as spending and margins rise.

If oil rises, then Tesla cars will become even more attractive for their saving properties. The market works in mysterious ways, and this is one of them; follow the money, and you might find yourself with a double-digit upside and a hedged-out position against oil swings.

→ Nvidia’s Quiet $1 Trillion Pivot (From Weiss Ratings) (Ad)

Should you invest $1,000 in American Airlines Group right now?

Before you consider American Airlines Group, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and American Airlines Group wasn't on the list.

While American Airlines Group currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
The Goldman Sachs Group (GS)
4.8524 of 5 stars
$461.18+0.7%2.39%18.01Moderate Buy$440.57
Southwest Airlines (LUV)
4.003 of 5 stars
$26.84+0.7%2.68%42.60Hold$30.10
Tesla (TSLA)
4.025 of 5 stars
$179.24+3.2%N/A45.72Hold$185.90
Norwegian Cruise Line (NCLH)
4.8648 of 5 stars
$16.00+2.8%N/A22.86Hold$21.00
American Airlines Group (AAL)
3.9343 of 5 stars
$13.84+0.1%N/A23.07Moderate Buy$17.62
Compare These Stocks  Add These Stocks to My Watchlist 

Gabriel Osorio-Mazilli

About Gabriel Osorio-Mazilli

  • gosoriomazzilli@gmail.com

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Experience

Gabriel Osorio-Mazilli has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Value investing, long/short trading, options, emerging markets

Education

CFA Level I candidate; Goldman Sachs corporate training; independent courses

Past Experience

Analyst at Goldman Sachs, associate at Citigroup, senior financial analyst in real estate


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