Top Picks for Airline Stocks as 'Recession' Warning Turns to Rally Projection
Airline stocks have been grounded in 2025, but the charts are telling a different story.
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The airline industry hasn’t exactly been flying high lately.
Just last month, Delta Air Lines DAL lowered its 2025 guidance. According to Delta CEO Ed Bastian, “I think we’re acting as if we’re going into a recession. I think everyone is going into a defensive posture”.
Meanwhile, American Airlines AAL withdrew its forecast for the year, citing economic uncertainty. United Airlines UAL has been besieged with cancellations at its Newark Airport hub, as air traffic control equipment and personnel have reached a breaking point.
2025 just hasn’t been a good year for airline stocks. Year to date, American is down 31%, United has lost 18% and Delta has fallen 16%. On the discount side, JetBlue JBLU has lost 27% and Frontier ULCC has lost 42%. Southwest LUV has fallen by just 2%, making it a top performer in this sector.
Despite the negative start to the year, the charts of these companies are hinting that airline stocks may soon take flight.
Let’s go to the charts to see where the airline sector is headed. We’ll start with Delta Air Lines, which has formed an inverted head and shoulders pattern (shaded yellow, L-H-R). This bullish reversal pattern projects American to the $62 area.
Competitor American Airlines has formed a cup-and-handle pattern (shaded yellow). The bullish pattern suggests that shares of the Fort Worth, Texas-based carrier could soon reach $15 per share.
United Airlines has the largest fleet in the world, with over 1000 aircraft. While United has recently made headlines due to cancellations, particularly at Newark, shares of the Chicago-based giant have been on the rise.
Shares of United have formed an ascending triangle pattern (black lines). This bullish formation projects a rally to the $105 area.
JetBlue Airways just broke out to a two-month high on above-average volume (arrow). The New York-based carrier soared nearly 10% on Tuesday.
Even Southwest Airlines is getting in on the action. Southwest jumped 5.5% on Tuesday as the Dallas, Texas-based airline announced that bags would no longer fly for free. Southwest is facing stiff resistance at $35.50 (black line).
Because airline stocks are out of favor, they are a counter-intuitive play, but that’s not necessarily a bad thing. It’s usually better to be early than late.
My top picks in this sector are Delta and American, with United a close third.
At the time of publication, Ponsi was long DAL and AAL.
