It may be time to fade airline stocks.
Though U.S. travel exceeded 2019 levels over the July 4th holiday weekend based on TSA screenings, the group's technical setup is flashing warning signs, Piper Sandler's Craig Johnson told CNBC's "Trading Nation" on Friday.
A chart of the U.S. Global Jets ETF (JETS) shows the basket of airline stocks breaking below an upward support line and its 50-day moving average, both troubling signs for Johnson, who is his firm's senior technical research analyst.
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The fact that 2021 has seen the most unruly passenger incidents in 25 years and it's only halfway through also doesn't bode well for the airlines, Johnson said.
"From my perspective, the easy money has been made on this recovery trade," he said. "I think it's now time to take some money out of JETS."
The one airline stock that could still have fuel left in its tank is Southwest Airlines, Boris Schlossberg, managing director of FX strategy at BK Asset Management, said in the same "Trading Nation" interview.
"They're the low-cost leader in the industry. They have the best balance sheet and long term, I think they're creating a very, very strong brand," Schlossberg said. "Yes, they're facing cancellations. Yes, they're having delays. But they are standing up and they are trying to fulfill capacity right now, unlike Delta and United."
Delta and United Airlines did not immediately respond to CNBC's request for comment.
Schlossberg expected Southwest to take market share from its competitors as consumer travel bounces back because it's more reliant on that than business travel.
"To me, that's the one trade within JETS that I would get long and stay long for the next 18-24 months," he said.
Southwest shares ended trading down less than half of 1% at $53.66 on Friday. JETS ended trading down half of 1% at $24.50.