Free Stock Tips

Strong sell signals this week for Copa Holdings, S.A. (NYSE:CPA), the parent company of Copa Airlines.

CPA outlined the challenges it faces in a recent press release, and it isn’t all that different from the problems U.S. airlines are facing. The company had to ground all flights, and it won’t resume operations until June 1.

When it does resume, its operations will be approximately 10% of their pre-COVID-19 size because the company doesn’t think there will be enough demand to resume all at once. Its Panama segment only expects to reach 40% of its usual flights by December.

CPA is starting to follow its 50-day moving average lower. In fact, both its 50-day and 200-day moving averages are in a downtrend.

The company’s recent earnings surprise was on adjusted earnings per share numbers. Those adjusted numbers were still down over 12% from last year, and this slow return to normal operations isn’t going to help over the coming quarters.

To keep the cost of this put trade low, a $25 strike price is just above the stock’s recent low.

The stock will probably move to retest support at around $34, possibly after rising a little next week. If it breaks below that level, traders may be able to collect a profit on this put option.

Buy to open the Copa Holdings, S.A. (CPA) July 17th $25 Puts at $1.60 or lower.

As always, do your own research, don’t chase gaps, use limit orders to enter positions, always use stop loss orders to protect your position, and take profits when you are in a position to do so.

Good Trading