American Airlines Group Inc. (NASDAQ:AAL) may have formed a bearish chart pattern known as a double top. If the stock falls through its support line, a breakdown could soon occur. Read more to learn how to take advantage of this trading opportunity.American Airlines Group Inc. (AAL) is the world's largest airline by scheduled revenue passenger miles. It’s wholly-owned subsidiaries are American Airlines, Envoy Aviation Group, PSA Airlines and Piedmont Airlines. The company’s primary business is to provide passenger and cargo services.
The company’s operations were hurt by the coronavirus-led drop in travel demand, which negatively affected passenger revenues. The company incurred losses in five consecutive quarters. Management expects system capacity for the second-quarter to fall in the 20-25% range compared with the second-quarter of 2019. As more people have gotten vaccinated though, bookings are improving.
As of March, the company had $14 billion in cash compared with only $2.4 billion in short-term debt. However, AAL’s profit margin is dismal at -61.5%. Sales are down an average of 20.4% per year over the past five years, highlighted by a drop of 61.5% in the last year. The good news is that analysts forecast revenue to surge 340.2% year over year in the second quarter.