The analysis of American Airlines (AAL) shares indicates a wave (4) blue correction, with the price expected to fall between 15.13 and 14.43, known as the Blue Box buying area. Long positions can be entered within this Blue Box, anticipating at least a 3-wave bounce from here. If the price hits the 1.618 Fibonacci extension level at 14.43, the trade will be invalid.

Current Stock Performance

The stock has rebounded, breaking above the 50% Fibonacci retracement level in relation to the X red connector. This confirms that the wave (4) blue pullback is at the 14.93 low, allowing for long positions with reduced risk. The target range for the stock is expected to be 16.88–17.49, unless it drops below 14.93, which would lead to a deeper pullback and new long entry opportunities. For trading signals, the Live Trading Room provides real-time insights to members. This analysis is for informational purposes only. It’s essential to do your own research before making any trading decisions. FXStreet is not responsible for investment risks, including potential losses, and does not provide personalized investment advice. Recent price action in American Airlines shows a potential bounce from the $14.93 low, presenting a key opportunity. The outlook is positive for a movement toward the $16.88–$17.49 target area in the coming weeks. This technical situation suggests using short-dated call options or bull call spreads to take advantage of the expected upward momentum.

Market Influences

However, caution is necessary. If the price falls below the $14.43 level, the bullish outlook will no longer hold. Recent data indicates that January 2026 passenger load factors are nearly 3% lower than initial forecasts, raising concerns that could affect airline stocks. Any signs of further weakness should prompt a reduction in bullish airline positions. The broader market is affected by geopolitical uncertainty, especially due to renewed tariff threats against some European countries. This influenced market fear last week, causing the CBOE Volatility Index (VIX) to exceed 23, a level not consistently reached since market turmoil in the third quarter of 2025. This heightened volatility raises option premiums, requiring accurate entry and exit strategies. This risk-off sentiment is also putting pressure on the U.S. dollar. The Dollar Index (DXY) has fallen below the crucial 101.50 support level, continuing its decline from late 2025. This weakness makes bearish plays on the dollar, like buying puts on USD-based ETFs or calls on the Euro, increasingly appealing. Due to these factors, investors are turning to safe havens like precious metals, which has pushed gold prices to new heights. Gold is currently trading near $4,700 an ounce, driven by the same tariff worries affecting equity markets. This strong trend suggests that buying call options on gold and silver ETFs could be an effective way to protect against further market instability. Create your live VT Markets account and start trading now.

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