Spirit Airlines Flies Higher After Merger Announcement: What's Next?

Spirit Airlines Inc. SAVE shares are pushing higher after the company announced a merger agreement Monday with Frontier Group Holdings Inc ULCC. The company also reported better-than-expected fourth-quarter EPS and sales results.

The transaction implies a value of $25.83 per Spirit share, representing a premium of 19% over the Feb. 4, 2022 closing price of Spirit.

See Related: Frontier, Spirit Airlines Agree To Merge In $6.6B Deal

Spirit Daily Chart Analysis

• Shares have been ripping higher and have reached resistance in what traders call a sideways channel. The stock looks like it was unable to cross above the $25 resistance level and has fallen slightly below the mark. Support for the stock may be found near the $20 level, as this has been an area of support in the past.
• The stock is trading above the 50-day moving average (green) but below the 200-day moving average (blue), indicating the stock looks to be consolidating. The 50-day moving average may hold as an area of support while the 200-day moving average may act as an area of resistance.
• The Relative Strength Index (RSI) has been pushing higher the past couple of weeks and now sits at 63. This shows more buyers have moved into the stock since the merger and the earnings announcement.

What’s Next For Spirit?

Spirit has been climbing since the announcements this morning and has now reached an area of resistance. This $25 resistance level may continue to hold in the future until the stock can cross above it and hold the area as support.

Bullish traders are looking to see this resistance cross happen and for the stock to continue on its bullish push. Bearish traders are looking to see the stock get rejected at the resistance level and to see the stock begin to fade back lower. Bears are also looking for the RSI to fall back below the middle line.