Airlines: A Brief Layover Sets Up A Healthy 2026

By Levi at Elliott Wave Trader; Produced with Avi Gilburt

Whether or not you consider yourself a fan of Paul Tudor Jones, his long track record—particularly his successful navigation of the 1987 crash—makes him a standout in the world of market analysis. Jones blends technical structure with macro awareness and credits Elliott Wave Theory as a cornerstone of his success.  

"I attribute a lot of my success to Elliott Wave Theory. It allows one to create incredibly favorable risk reward opportunities.” - Paul Tudor Jones

To distill it: find a sector in an upswing and identify the highest-probability setups within it. Know your risk and preserve capital if the setup does not play out. That’s exactly what we do across all areas of the marketplace. 

In this piece, we’ll explore a favorable risk-reward opportunity shaping up into 2026. Now, you know the sector we will analyze because you’ve already seen the title. But, what are the specific parameters to guide us and is there a select choice that presents as best in class? Let’s dig in!

Lyn Alden Presents The Airline Sector Fundamentals

“Airline stocks have historically been a challenging place to invest, even for investing greats like Warren Buffett. On numerous occasions, the Oracle of Omaha discussed the lack of economic moats that airlines have, only to go ahead and buy them anyway as value plays. In his latest attempt, he bought the big four US airlines in 2016 and then infamously sold them at the bottom in 2020.

For similar reasons, I've often been hesitant to touch airline stocks even when I'm bullish on the industry. I've historically preferred to invest in airport stocks or digital travel agencies when expressing a bullish outlook on the travel industry as a whole.

With that in mind, I do currently find airlines to offer an attractive multi-year investment potential. They come with significant risks and a general lack of economic moats, but they're an interesting trade idea as a smallish position. Among airlines, I find Copa Holdings to potentially offer the most interesting value.” - Lyn Alden

A Sample Of StockWaves Commentary

Each and every week Zac Mannes and Garrett Patten hold an interactive webinar for StockWaves members. Requests can be made for specific tickers and they will also share stock charts that are presenting as high-probability setups. Here is some commentary from a recent webinar hosted by Zac.

“As discussed in the StockWaves webinar on 7/10 we see a strong long setup in the (JETS) ETF over the next 12-24mo. The strongest representation of this sentiment structure from the key holdings is (DAL). In the near term these are completing the initial moves we wanted to see off April lows and due for attempts at consolidation, the 48-42 region is ideal for support on (DAL) to set up the next swing targeting the 90 region. The Elliott Wave pattern has many good points of Fibonacci confluence at multiple degrees which we have discussed in-depth.

From a fundamental side Lyn Alden also sees airlines as undervalued & bullish over the next few years based on FAST Graphs, "But they're junk-rated low-moat companies, so I would defer mainly to technicals*.”

"Between the two, DAL is more creditworthy. A less-bad credit rating, and able to pay dividends. DAL has a BBB- credit rating (lowest investment-grade rating), whereas UAL is junk at BB.”

“*That's where we come in, the April low was a key higher low at a larger degree that held the last reliable level of Fibonacci support. Off that DAL (along with JETS, UAL, & CPA) have a clear "five wave" move up into the ideal resistance region expected for just the wave i of their respective C-waves. C-waves are themselves "five wave" moves, Elliott Wave is #Fractal so the same patterns unfold at different degrees and become the segments of larger patterns. This particular C-wave is inside the wave (3) of a much larger pattern off the 2020 lows. The nature of that larger pattern off 2020, a "diagonal" means the subsequent "(4)th" wave is likely to be rather deep so our focus is primarily on the favorable Risk:Reward for the remainder of the swing projected off the April low toward 90 & 100 with extension toward 120s possible.” - Zac Mannes

You will find that Zac has a nearly uncanny way in his analysis that leads to favorable setups being discovered. His commentary is also packed with meaning and weight. This can take a bit to assimilate, particularly for the newly initiated. So, let’s do that in our next segment.

Unpacking The Analysis

We want to make this actionable intel. There are certain nuances to this type of analysis. And once understood they will greatly add to the value and meaning of the commentary. Perhaps a visual aid?

It would seem that this is completing the initial stages of a larger rally, just as Zac discussed. The standard retrace zone here would be 20 - 22 for wave ‘ii’. 

DAL appears to stand out from both the fundamental side as well as the structure of sentiment via price on the chart. Zac has pegged the 42 - 48 area for a pullback. That zone will be narrowed as the subwaves of this next anticipated corrective move form.  

A similar pullback is presumed here with 65 - 75 being the general target zone. 

We’re looking for a move toward 93 – 100 over the next several weeks. 

There are many ways to take advantage of the setups shared above. Some may choose to ride their preferred chart only. Others might only trade the tracking ETF, (JETS), as it spreads out company specific risk. It is your trading/investing plan and you know your risk profile and time frame.

Conclusion - Why This Sector? Why Now?

Remember, we search across all sectors to identify favorable setups with defined risk versus reward. While the airline sector can be challenging for long term investors, it will present moments in time where the structure of price on the charts will line up with higher probability. When both sentiment structure and macro forces align—as we see here in the airline space—opportunity emerges for those with a framework to act. 

That’s what we are seeing over the next 12 - 24 months. I would like to take this opportunity to remind you that we provide our perspective by ranking probabilistic market movements based on the structure of market price action. And if we maintain a certain primary perspective as to how the market will move next, and the market breaks that pattern, it clearly tells us that we were wrong in our initial assessment.

There are many ways to analyze and track stocks and the market they form. Some are more consistent—and more repeatable—than others. For us, this method has proved the most reliable and keeps us on the right side of the trade much more often than not. Nothing is perfect in this world, but for those looking to open their eyes to a new universe of trading and investing, why not consider studying this further? It may just be one of the most illuminating projects you undertake.