LCC

[AussieTrader]

Intraday Update:

Trading in LCC shares has been halted at the request of LCC due to the announcement that Merril Lynch will buy 19M shares (about 20% increase on the current outstanding number) in an underwritten public offering. The trade halt is to allow the disbursement and pricing of shares to be finalised. LCC will release the pricing details in a later press release.

OK, well, I doubt MER wil be paying above the current market price. I don't know how they will price them, perhaps on an average of the past 'x' sessions or some such. But as soon as the price is released expect that to be where the trading starts and it might not be pretty if the price is unattractive relative to todays price. As we don't issue intraday trade plan changes we have to keep our strategy with the stop at $6.90.

I have a feeling this will be the end of the LCC momentum for a while.

[AussieTrader]

Update:

LCC came out of trade halt and the price of the new issue purchased by Merril was set at $8.50. In fact the initial 19M shares ended up at 21.8M as MER exercised an over allotment option to but the extra quantity.

So what does this do? Well as expected LCC immediately traded down to the issue price of $8.50, but on decent volume traded back up to the $9 area in afternoon trading. I think we can use this $8.50 area as a guide for strong support being that 20% or so of the issued shares have just transacted at that price level. I don't know what MER's plan is, but they must see they have the ability to sell those shares at a higher price than they paid (and not just a few cents higher I would imagine).

Lets keep with our original plan, the $8.50 zone gives us great support, watching for consolidation below $10 before a new breakout. We will move our stop to $7.20, well outside volatility and below the 'protection' that $8.50 offers us.

Trade Plan:

HOLD LCC with Stop at $7.20

[AussieTrader]

Update:

I think the extra 21.8M shares that MER now have will do 2 things in the short term. 1) Based on the $8.50 purchase price they create a strong support zone 2) Because we have no idea what MER plan is we might see continued problems breaking the $9 zone as there may well be extra selling at that level by MER creating supply here and just making the breakout continuation a bit harder.

Look at UAUA (bottom chart) which has moved on nicely in the past couple of sessions whilst LCC has stopped somewhat due to the effect of this dilution.  Prior to that, the 2 stocks have been trading very much in tandem with each other.

Lets continue the same trade plan for now. Technically we still have a nice consolidation happening around $9, which still looks ok to me, we do have the 200sma looming just above at $10.43 which again may put a lid on any short term move (again look at UAUA, the 200sma is a lot further away and perhaps will give more upside potential to the stock for now). Anyway, no change to the trade plan for now.

Trade Plan:

HOLD LCC with STOP at $7.20

[Ramsburg]

Update:

Most Airline stocks fell yesterday in reaction to some positive action on the Crude prices, and also correcting the recent big rally within the Airline sector.

LCC closed down 15% near our stop, and probably will continue this correction for the short term (Light Crude up today). We already sold half of this position at $9.35 last week, now we'll sell the rest today.

Trading Plan:
Sell LCC at or near the open.

[Ramsburg]

LCC sold on the open @ $7.00

[setravis]

Watched and played again...
could have made a nice profit.


52wk Range: 1.45 - 28.71
Volume: 9,633,209
Avg Vol (3m): 13,029,000

[la-onda]

fyi:

LCC: Calyon Ups to Add from Neutral; Sets Tgt @ $17; Analyst Notes
Tuesday , October 28, 2008 09:33ET
Issuer: US Airways Group, Incorporated (NYSE: LCC)
Analyst Firm:  Calyon Securities
Ratings Action: UPGRADE
Current Rating: Add (from Neutral)
Target Price: $17.00
Analyst Comments: Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices.