For more than a year, the ~$90 level has kept a lid on United Airlines stock, except for one major rally in Q4 2018 and one rally in July 2019. Other than that, the shares have mostly been range-bound between $77 and $90.
Investors are hoping that shares can break out into year-end, and they're hoping that a bottom-line beat can be the catalyst.
Earnings of $4.07 per share topped expectations by 11 cents, while revenue of $11.38 billion grew 3.5% year over year but missed analysts' estimates by $50 million.
Management also gave a notable boost to the bottom end of its full-year earnings outlook, while giving a slight boost to the top end as well.
But the midpoint of the new range -- earnings of $11.25 to $12.25 a share -- comes up short of consensus expectations, which sit between $11.86 to $11.95 per share, depending on which source investors obtain their estimates from.
Still, it's positive to see shares moving higher. Let's take a closer look to see what it will take for UAL stock to really take flight.
Trading United Airlines Stock
As you can see on the daily chart above, United Airlines stock had plenty of trouble pushing through the $90 mark. That range resistance mark dates back to September 2018. It also happens to be the 38.2% retracement for the one-year range.
In other words, we're looking for a close above $90. The fact that the shares were knocked down from session highs of $90.84 shows that traders still respect this resistance zone. A close over it may suggest it's willing to give way.
Above range resistance and the September high is the first upside target at $91.84. Above that and the 23.6% retracement at $92.93 is the next upside target. Should UAL stock clear both marks, investors will be looking for a move north of $97, with the 52-week high hovering up at $97.85.
Like Bank of America's (BAC) - Get Reportpost-earnings rally, United Airlines stock is hitting range resistance after hurdling short-term downtrend resistance. (Incidentally, B of A is Real Money'sStock of the Day.)
If UAL stock can maintain above this prior resistance mark (blue line), it increases the odds of a potential breakout. A move below this mark, however, thrusts the 50-day and 200-day moving averages into the picture, both of which come into play near $86. Below that and a move down to the $80 to $84 area is in the cards.
It helps to keep it simple. In that case, above $90 is bullish.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.