Alaska Air Stock Forms Death Cross: Is Turbulence Ahead For ALK?

Alaska Air Group Inc. ALK stock just hit a technical milestone that no investor wants to see: a Death Cross.

This ominous indicator occurs when the 50-day simple moving average (SMA) crosses below the 200-day SMA, signaling a potential continuation of the stock's downward trajectory.

Alaska Air stock is already down 7.93% year-to-date and 20.83% over the past year, and this latest development could mean the skies are about to get even rougher.

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Rough Skies: The Technical Picture

The Death Cross is a widely recognized bearish signal, and for Alaska Air, it's particularly concerning given the stock's recent performance. Alaska Air stock is trading at $35.30, well below its 50-day SMA of $38.53 and its 200-day SMA of $38.78. This gap reflects sustained selling pressure and a lack of investor confidence, compounded by the company's ongoing challenges.

A Bumpy Ride: News That's Shaping Sentiment

Alaska Air's stock woes aren't just about technical signals. The company has been in the headlines for a mix of news that's likely weighing on investor sentiment. Recently, Alaska Airlines announced an investment in JetZero, a company developing a new blended-wing body aircraft aimed at slashing fuel burn and emissions by 50%.

While this reflects Alaska's commitment to sustainability, it also signals long-term investments that may not pay off immediately.

Moreover, Alaska Air is still navigating the regulatory turbulence surrounding its proposed merger with Hawaiian Airlines. The Justice Department has extended its review period, keeping the deal—and the uncertainty around it—in limbo.

Meanwhile, the National Transportation Safety Board (NTSB) recently criticized Boeing Co BA, Alaska's aircraft supplier, for a midair emergency involving a 737 MAX 9, adding another layer of concern for investors.

Read Also: NTSB Calls Out Boeing For Safety Lapses: FAA Steps Up Scrutiny

Is There Any Lift Left?

Despite the grim technical outlook, there are some mixed signals. The stock is trading slightly above its 8-day SMA of $34.56, indicating a short-term bullish signal.

However, this is overshadowed by the more substantial bearish signals from the 20-day, 50-day, and 200-day SMAs. Investors hoping for a quick turnaround might be disappointed, as the Death Cross suggests the downward trend could persist.

What's Next For Alaska Air?

Alaska Air is facing a perfect storm of technical challenges and news-driven headwinds. The Death Cross doesn't bode well for the stock's immediate future, and with ongoing regulatory scrutiny and operational issues, the turbulence might continue.

Investors might want to fasten their seatbelts—this ride could get a lot bumpier before it smooths out.

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