Over the last few weeks, we’ve published several reports highlighting the broadening participation across cyclical industries, driven in large part by the sharp reversal in crude oil prices. As energy costs have eased, many of the groups that struggled during oil’s advance have begun to improve.
One industry that particularly caught our attention this week was airlines, which stand to benefit significantly from lower fuel costs. The group broke out to a new all-time high, completing an eight-year consolidation in the form of a large ascending triangle—a pattern typically associated with bullish trends.
Airline relative strength versus the S&P 500 has rarely persisted for extended periods. Over the last 70 years, only two notable multi-year uptrends in relative performance have developed: 1962-1964 and 2012–2014. Could a third such period now be underway?
Each Chart of the Week highlights a theme, idea, or historic event that stood out to us. If you find it interesting, feel free to share it with friends or colleagues.
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