Quietly chugging (or perhaps, soaring) along so far in 2026 has been the airline industry.
The NDW team presents this quarter’s full length “Weight of the Evidence” written report, detailing key technical shifts that occurred over the last quarter as well as important metrics to watch throughout the third quarter and rest of 2026. You can find the article linked HERE. Note, this document is designed to be modular in practice, with each page covering a specific topic in depth. It has also been approved for financial professionals and non-professionals alike.
A webinar recording of Senior Portfolio Manager John Lewis and Senior Research Analyst Miles Clark discussing the report in more detail will be made available in the coming days. CE credit is available.
During the summer, out of office emails are commonplace as everyone tries to take time off to enjoy time with family, friends, or maybe just disconnect for a week or two. With every OOO automatic reply you get, you can probably bet that to get to their destination, someone got on a plane to get there. Quietly chugging (or perhaps, soaring) along so far in 2026 has been the airline industry. Bouncing off 2026 lows, airline representative JETS printed new all-time highs to open July, bringing with it a pair of PnF buy signals on its default chart. The fund’s strong 5.80 score as of 7/7 points to a strong technical posture as it outscores the average transportation fund by just over 1 full point on the ACGS page. While a renewal of concerns of unrest in the middle east saw the fund decline ~4% with intraday action on 7/8, the overall picture remains quite strong as the fund reverses out of heavily overbought territory on its default chart.
Speaking of unrest in the middle east, a (for the most part) dissipation of said conflict has been the main catalyst for upside action as crude prices have cooled to close out Q2. Using the correlation calculator on the platform to compare JETS (and a handful of other single-stock names) to Crude Oil (CL/) & Gasoline (IJ/) reveals a somewhat moderate inverse relationship between the airlines space and fuel-based inputs. This makes sense- fuel/oil represent a significant potion of total airlines costs (~29% source: https://www.iata.org/en/publications/newsletters/iata-knowledge-hub/unveiling-the-biggest-airline-costs/). Crude falling well off its 2026 highs back into the low/mid $70’s should, in theory, reduce the input costs related to a large portion of the variable expenses airlines need to run.
Of course, the previous comment would be true if jetliners pumped pure, unrefined crude oil into their tanks. Unfortunately, that isn’t the case, as this “raw” crude must be refined into usable product before takeoff. While not calculating the price of jet fuel specifically, the 3-2-1 Crack Spread can help identify the costs of refining 3 barrels of crude (your input) into 2 barrels of gasoline and one barrel of distillate (diesel fuel, heating oil, etc.) In layman’s terms, a wider spread signals a higher cost of refined outputs compared to raw inputs. Tracked by 321CRACKSPREAD on the platform, this value has stayed elevated despite a decrease in input costs. This should largely make sense as many of the US based strikes in Iran targeted refinement centers, keeping relevant supply centers low. Regardless, despite this spread continuing to expand markets appear to be pricing in tailwinds of further conflict dissipation and an eventual return to normal for raw-to-refined costs… which ultimately would be a rather significant tailwind for those areas relying on refined outputs.
Delta DAL remains uniquely positioned as one of the major airline suppliers which owns its own refinery. While obviously still affected by the price of jet fuel and related costs, this helps act as a natural hedge to fluctuations in crude oil refinement. As the largest holding in JETS, Delta DAL remains a technically strong 5/5’er at the time of this writing on 7/8. It did return to a sell signal on its default chart, meeting some resistance ahead at all-time highs at the top of its 10-week trading band. As it falls back to some old resistance/support on its chart throughout the $80’s, those looking for focused exposure to the airlines space might consider a “flyer” position in DAL. PnF will do its best to look through the noise markets throw at us from around the globe, but it would be useful to set alerts for notable price breakpoints to be alerted of important price action as it occurs… regardless of if it is driven by a major news headline or not.
