Morning Trade for April 13th 2021

Stocks suddenly slipped this morning after the FDA said its halting use of the Johnson & Johnson’s (JNJ) Covid vaccine after 6 cases of a rare blood issue have been reported.  Stocks that stand to be hurt the most if the rapid vaccine rollout slows also fell in early trading, including airlines and cruise lines.

“I don’t think there’s going to be a huge reaction in the market beyond the knee jerk reaction we’re getting here right now,” said Mike Wilson, chief U.S. equity strategist for Morgan Stanley.  “We’re optimistic, very optimistic that we’re going to be reopened fully in the second half of this year.”  

Our trade alert for today highlights a reopening play that could slip even more on the negative JNJ vaccine news, offering an attractive entry point for our readers looking to add to their reopening positions.  

United Airlines (UAL) stock is receiving positive commentary from analysts. That’s because analysts are optimistic that UAL can weather the current storm with enough liquidity.  UAL stock has been in rally mode since the start of 2021, with the shares up over 40% year-to-date.  Of course, the notable slowdown in the pandemic could be the reason.  It could also because the vaccination is starting to have a positive impact. 

Of course, the fourth quarterly report from January 20 wasn’t what any investors were hoping for.  Obviously, it wasn’t going to be rosy as net loss came in at $1.9 billion for the quarter.  However, there were still some encouraging signs from the company.  For one, the company was able to make significant progress in cost reduction.  It has been doing pretty well in defending its balance sheet.

Also, United Airlines CEO Scott Kirby even said that the company is increasing prices for summer travel. All these certainly bode well for UAL stock in the near term. 

At the time of writing this, shares of UAL stock were down more than 2.5% in pre-market trading offering up a more attractive entry point.  

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