United Airlines Sees A Bearish Breakout: What's Next?

United Airlines Holdings Inc UAL shares are trading significantly lower Monday alongside other airline companies amid travel uncertainties due to the Russia-Ukraine conflict. The conflict is causing geopolitical uncertainties which are weighing on travel demand.

United Airlines was down 14.38% at $31.43 Monday afternoon at publication. The stock recently broke below support in a pattern.

See Also: United Airlines Debuts New 'Bag Drop Shortcut' Service

United Airlines Daily Chart Analysis

• The stock has fallen below the $42.50 support in what traders call a descending triangle pattern. This strong break below support shows that bears have taken control of the stock. The descending triangle pattern is known as a bearish continuation pattern if support is broken. If the $42.50 level becomes resistance, it may confirm the bearish pattern.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) has been dipping lower the past few weeks and now sits at 24. The RSI has fallen into the oversold region showing that sellers have been pouring into the market. If the RSI stays in this region the stock may continue to have selling pressure and move lower.

What’s Next For United Airlines?

United Airlines broke out of the bearish pattern and has been moving lower since. This hints that more bearish moves are likely coming. Bearish traders want the stock to continue falling and see the RSI stay oversold. Bullish traders want the stock to bounce and start forming higher lows back toward the $42.50 level. Bulls are then looking for a break above this level and the moving averages for the stock to look bullish again.

Photo: Courtesy United Airlines