Bearish Trendline Could Push Airline Stock Even Lower

A new ceiling appears to be emerging at the $22.50 region

Fernanda Horner

Digital Content Manager

Nov 2, 2022 at 3:33 PM

SAVE

The share of Spirit Airlines Incorporated (NYSE:SAVE) are pivoting lower today, last seen down 1.5% at $21.62, as a new ceiling seemingly emerges at the $22.50 region and the stock's October rally loses steam. The security has been switching between year-to-date gains and losses of late, but a historically bearish trendline could knock SAVE firmly below its 2022 breakeven level.

Digging deeper, Spirit Airline stock is now within striking distance of its 260-day moving average, which has acted as pressure since late August. According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, SAVE has seen six similar signals in the past three years, and was lower one month later 67% of the time, averaging an 18.1% loss. A move of similar magnitude would place the stock back below the $18 mark.

SAVE 260 Day

Short sellers have been piling on Spirit Airlines stock, with short interest up 22.5% in the last two reporting periods. The 9.43 million shares sold short now account for 8.7% of the equity's available float, or more than one week's worth of pent-up buying power.

It's also worth noting the security boasts attractively priced premiums at the moment, per SAVE's Schaeffer's Volatility Index (SVI) of 33%, which ranks in the low 9th percentile of its annual range.

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