Conclusion, Investment Implications, Strategy

Air Transport Services Group, Inc. (ATSG) is amid favorable conditions to resume its current Strategic advance from major underlying support near $25.70, which is currently being tested.  A sustained rise above the $25.70 area would target an additional 20% rise to $32.43 per share. 

Analysis and Rationale

Industrials company Air Transport Services Group, Inc. (ATSG), through its subsidiaries, operates in the airfreight and logistics industry. The company owns and leases cargo aircraft to airlines and other customers. It also provides airline operations to delivery companies, airlines, e-commerce operators, freight forwarders, and the U.S. Military, as well as operates charter agreements. In addition, the company offers mail and package sorting services, as well as related maintenance services for material handling equipment, ground equipment, and facilities; airframe modification and maintenance, component repair, engineering, aircraft line maintenance, and insurance services; and flight crew training, load transfer and sorting services. Further, it rents ground equipment and sells aviation fuel; and engages in the resale and brokerage of aircraft parts. As of December 31, 2019, the company owned a fleet of 94 serviceable Boeing 777,767, 757, and 737 passenger and cargo aircraft. The company, formerly known as ABX Holdings, Inc., was founded in 1980 and is headquartered in Wilmington, Ohio.

The rightmost green highlights in Chart 1 below shows that ATSG is testing major underlying support at its 200-day moving average, currently at $25.70, while monthly (our Tactical time period) oversold. The other green highlights show that previous instances of this, in late September and late June 2020, helped trigger the resumption of the June major uptrend as defined by the 200-day MA.  This sets up a low-risk buying opportunity because, If that major uptrend is still valid, this is where it should resume.

Chart 1

A sustained rise above the $25.70 area would indicate this is indeed the case and target an additional 20% rise to $32.43 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $25.63 area, a long entry price of $26.98 would provide a 1:4.0 risk/reward ratio (risking $1.00 to make $4.00) with an initial risk of 5.0%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.