What's going on my fellow stock market gamblers, i'm matt and i'm an exciting stock analysis, video for you today, from both a fundamental and technical level, i will be breaking down one of dave, portnoy's, favorite stocks, spirit, airlines beyond being highly entertaining davey daytrader global global has Been bullish on the airline industry, specifically spirit, i want to discuss some key details related to both the company and the industry, so you have a better idea if el presidente's play makes him a mad genius or simply mad, if you're interested in this type of content Subscribe to the channel and don't forget to turn on your notifications, so you don't miss any of the new videos. It would also be awesome if you could hit the like button and leave a comment, because it really helps with getting these videos in front of other people. Spirit airlines whose stock ticker is s-a-v-e is a 1.6 billion dollar budget. Air travel company coming into 2020 spirit was one of the fastest growing airlines, but that didn't help them when the entire industry got demolished from the start of this year.

To the most recent close, the stock is currently down 55 at its low in mid-march. It was down a brutal 83 percent since that low it has managed to rally an impressive 115. The airline industry as a whole has been a symbolic fight between those who think the worst is behind us and those who think we have a rocky journey ahead, regardless of what you personally believe, these massive percentage swings should make. You wonder if this is an opportunity to make money.

Let me cover some of the main points between both the bear camp and the bull camp. The bears are arguing that spirits revenue is taking a massive hit. In fact, their year-over-year revenue is down over 90. This definitely isn't good, especially for a company that came into this year highly leveraged, even if this wasn't an issue, the bears have pointed out.

That spirit is a fringe player in the airline space. This means, if things get really bad from an economic perspective, the government will be more focused on saving companies such as delta southwest and united and spirit will most likely be forgotten. The bull camp doesn't think that this doomsday scenario is likely and is focusing on the company's 1.7 billion dollars in liquidity at their current cash burn rate. They have enough runway to last for over two years.

On top of that, if the company decides to accept the cares loan from the government, the runway will be increased to 40 months. Ironically, some analysts think this is too much liquidity and the company may have an issue cutting it pushing those metrics asides. The bulls are very focused on the narrative of spirit airlines. Their budget-friendly niche makes them extremely well positioned if the industry returns as a whole.

History has shown that low price airfare is commonly the first to bounce back, whether you're, bullish or bearish. These volatile price wings do create a unique opportunity to generate a sizeable profit from a technical analysis. Perspective you'll best be able to optimize your risk to reward by placing your trades near regions of support and resistance. If you're bullish, i would first be targeting just below twenty dollars, because this area has served as resistance on two separate occasions.

If the bears cannot defend this line, i would then be looking for 22.50 if the airline industry catches, fire and the bulls pushed the market. Above this, i would then be looking for 26 from the most recent close to get to these lines of resistance. The stock would have to gain 8, 24 and 44. If you already have a long position, these would all be good levels to take some of your profits off the table on the flip side, if you're bearish, these are all areas, you could enter a short position at, so you can minimize your risk.

The first major support would be found at 1550, which the stock has bounced off of three times since june. On top of that, it has served as resistance on two separate occasions, and it is common for previous resistance to turn into support. If the bears push the market below this, there is quite a bit of demand between twelve dollars and ten dollars. If the bulls can't hold this region, i would then be looking for the previous low at 7.25.

From the most recent close, the first support would be a decline of 14. The region of demand would be a decline of 40 percent and the last support would be a drop of 60 percent. In the short term, i would be paying attention to spirit airlines, earnings report, which is on july 22nd, depending on how bad their quarterly revenue was hit and how they were able to manage their cash burn. This report could prompt a volatile move on the same day.

Other airlines will also be reporting, so we'll have a better understanding of how the industry is doing as a whole. In the medium term, i would be paying attention to how the stock reacts to these levels of support and resistance in the long term. I am bullish on spirit airlines, but that comes with a condition. The industry as a whole is highly reliant on us, avoiding a second wave of illness.

If this isn't avoided, i think all airline stocks will take another serious downturn, but if it is avoided, spirit is well positioned to take advantage of the rebound, because their budget airfare gives them phenomenal margins. Even though it is a high risk to reward situation. There is a decent chance: portnoy will be able to reap a massive profit off of this play for the sake of entertainment and our economy. I do hope, he's right.

What are your thoughts on spirit? Is it going to the moon or is it crashing? Let me know in a comment below if you enjoyed the video, let me know by hitting the like button, if you're interested in this type of content subscribe to the channel and don't forget to turn on your notifications thanks for watching and as always best of luck In the markets, you.