United Air shares fall the most in nearly a year on Wednesday, grim passenger unit revenue outlook weighs

July 20, 2017 8:13 am

Shares of United Continental Holdings Inc (UAL) plummeted almost 6% on July 19th, a day after the carrier projected that its third-quarter passenger unit revenue would be “disappointing”.

United Air shares closed lower for a fifth consecutive trading session on Wednesday. It has also been the sharpest daily loss since August 2nd 2016. The stock went down 5.91% ($4.66) to $74.24, after touching an intraday low at $73.70, or a price level not seen since May 3rd ($73.10). In the week ended on July 16th the shares of the transportation company added 1.15% to their market value compared to a week ago, which marked a second consecutive period of gains. However, due to yesterday’s retreat, the stock has neutralized earlier advance and is now down 1.34% so far during the current month, following a 5.55% drop in June. The latter has been the largest monthly loss since June 2016. For the entire past year, United Air shares gained 27.19%.

According to a statement by the third-largest US airline by traffic, its third-quarter passenger unit revenue, a key indicator comparing sales to flight capacity, is expected to remain flat. The metric registered a 2.1% surge in Q2 compared to the same period a year earlier.

In comparison, United’s rival, Delta Air Lines Inc recently reported a 2.5% growth in its second-quarter passenger unit revenue. Additionally, Delta projects a 2.5% to 4.5% increase during the third quarter.

“Investors were estimating 3Q17 unit revenue would be flat to up 2 (percent); our estimate was up 1.5 (percent), so the guidance is disappointing”, Cowen analyst Helane Becker wrote in a reference to United Continental Holdings’ forecast, cited by Reuters.

United Air’s unit operating costs, excluding fuel, were reported to have surged over 3%, with rising labor costs weighing on the entire industry.

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding United Air’s stock price, have a median target of $86.50, with a high estimate of $125.00 and a low estimate of $75.00. The median estimate is a 16.51% surge compared to the closing price of $74.24 on July 19th.

The same media also reported that 9 out of 19 surveyed investment analysts had rated United Air’ stock as “Buy”, while 8 – as “Hold”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the United Air stock are presented as follows:

R1 – $74.52
R2 – $74.79
R3 (Range Resistance – Sell) – $75.07
R4 (Long Breakout) – $75.89
R5 (Breakout Target 1) – $76.85
R6 (Breakout Target 2) – $77.26

S1 – $73.97
S2 – $73.69
S3 (Range Support – Buy) – $73.42
S4 (Short Breakout) – $72.59
S5 (Breakout Target 1) – $71.63
S6 (Breakout Target 2) – $71.22

By using the traditional method of calculation, the weekly levels of importance for United Continental Holdings Inc (UAL) are presented as follows:

Central Pivot Point – $79.38
R1 – $81.86
R2 – $83.86
R3 – $86.34
R4 – $88.81

S1 – $77.38
S2 – $74.90
S3 – $72.90
S4 – $70.89

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